Strategy, the company, has restructured its balance sheet to protect its substantial Bitcoin (BTC) holdings, treating them as a long-term strategic asset rather than a liquidity tool.
Key Strategy Shifts:
- Dollar Reserve Shield: Strategy created a large U.S.-dollar reserve specifically to fund everyday financial commitments, including dividend payments. This cash pool acts as a buffer, ensuring the company can meet obligations without needing to sell BTC, especially during market volatility.
- BTC as Long-Term Property: CEO Phong Lee emphasized that this structure allows Strategy to hold Bitcoin on a multiyear horizon, keeping operational financing separate from the crypto strategy. The new reserve covers dividends well into the future.
- Accumulation, Not Trading: Strategy continues to accumulate Bitcoin by deploying excess capital and using preferred-share financing when funds are available. The company explicitly avoids market timing, insulating itself from short-term trading pressure.
The Sale Scenario (The "2029" Question):
- Avoiding the mNAV Dilemma: The new dollar reserve is designed to circumvent the issue of mNAV (market value vs. value of Bitcoin treasury) falling below 1x, which can make raising equity unattractive.
- The Only Trigger: Lee stated that a BTC sale would only be forced by an unusually deep and extended market downturn lasting years, combined with the mNAV staying below 1x for the same long duration.
- Sale Timeline: Under such extreme conditions, Lee noted that a BTC sale might eventually be unavoidable, but he does not foresee this scenario happening before 2029.
Financing Mechanism:
- Preferred Shares: Strategy relies on preferred shares for capital. Lee described these as "hybrid instruments" that provide the flexibility of credit without the typical drawbacks of traditional debt or dilutive convertible structures. He views them as a key capital engine for accumulation.
This structural change is Strategy's direct answer to shareholder concerns about maintaining consistent payouts without liquidating their core Bitcoin treasury.
December 2025, Cryptoniteuae