Live markets: Bitcoin recoups early decline, rising back above $63,000
Strategy raised $216 million with the sale of 3,588 bitcoin last week, sending prices lower earlier on Monday.
Online experts weigh in on Strategy's move
"Strategy now has a completely different business model," wrote Peter Schiff, a longtime no-coiner and critic of Michael Saylor and his company. "Instead of selling common and preferred stock and issuing debt to buy bitcoin, the new strategy is to sell bitcoin to pay interest and dividends, pay off debt, buy back shares it sold, and hope that bitcoin’s price goes way up."
"You guys who believed selling 32 BTC caused sell-off three weeks ago have some reflecting to do," said Grant Cardone.
"I’m on board with the firm moving in this direction," wrote Josh Mandell. "When the usual approach to funding dividends is just selling more shares of common stock, opting to sell a small amount of bitcoin instead essentially behaves like a buyback of the common."
"Strategy just sold ~1.5 months of dividend obligations in one week," said Joe Burnett, an executive with fellow bitcoin treasury company, Strive. "At this pace and with 0% BTC appreciation, today’s dividend obligation is funded until 2056 ... At ~3.4% annual BTC appreciation, today’s dividend obligation can be funded indefinitely."
Finally, there's Strategy CEO Phong Le: "Strategy is evolving from one-way capital issuance to active capital management."
Saylor's 'inoculate' strategy might be working
Strategy's sale of just 32 bitcoin in late May (disclosed in early June) sparked a panic-driven plunge that took BTC from $74,000 to $60,000 in a few days.
Executive Chairman Michael Saylor had previously suggested it might be a good idea to "inoculate" the market over the company's intention to possibly fund dividend payments with occasional bitcoin sales.
Markets, however, are responding differently to last week's sale of 3,588 bitcoin (disclosed Monday morning). After a brief dip as the headline hit, bitcoin has returned to very close to its weekend highs, up 1.7% over the past 24 hours.
Bitcoin bounces above $63,000 recouping morning loss
The price of bitcoin (BTC) has reversed sizable early Monday losses, returning to $63,400 around the noon hour on the East Coast.
Bitcoin had rallied over the weekend to nearly $64,000, but lost all those gains and more after Strategy (MSTR) reported the sale of more than 3,000 BTC last week.
Buyers returned mid-morning, though, perhaps buoyed by the idea that Strategy may not have to sell a lot more of its stack, or maybe an offhand comment by President Trump that bitcoin might be a worthy addition to Trump Accounts.
Strategy booked an $8.3 billion bitcoin loss in second quarter
Included in this morning's SEC filing regarding bitcoin sales, Strategy (MSTR) disclosed an $8.32 billion loss on digital assets during the three months ended June 30.
Bitcoin started the second quarter at around $68,000 and ended it at roughly $60,000.
Nine months since bitcoin's all time high
Exactly nine months ago, on Oct. 6, Bitcoin reached its all time high of around $126,000. It now trades near $62,500, a roughly 50 percent correction, after falling as low as $57,800.
If the four year cycle continues to hold, a historical pattern in which Bitcoin has tended to move through approximately four year periods of bull markets, bear markets, and recoveries, then the cycle bottom may still be months away, potentially around October.
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