Strategy’s leveraged Bitcoin model has faced its first stress test: Grayscale
Grayscale says Strategy’s leveraged Bitcoin model is under strain, limiting its ability to keep buying BTC and raising the risk of more sales. The firm’s small sale of 32 BTC, alongside $128 million in share sales, helped rattle sentiment as Bitcoin fell and Strategy’s stock dropped to a two-month low. Grayscale warns the bigger issue is Stretch (STRC), Strategy’s preferred equity instrument. STRC is meant to trade near $100 with an 11.5% dividend, but it has fallen below par, which could force Strategy to raise payouts to attract investors. That would increase cash costs and may require additional Bitcoin sales, creating a negative feedback loop. Grayscale says Strategy likely has limited ability to accumulate more BTC at current prices, and that fewer leveraged BTC holdings would be healthier for the broader market.
