Strategy’s Leveraged Bitcoin Model Is Under Strain, Researchers Warn
Strategy’s leveraged Bitcoin model is under pressure as its preferred equity, STRC, trades below its $100 target price at around $95. That signals investors want a higher yield than the current 11.5% dividend, raising the risk that Strategy must increase payouts. Higher cash demands could force more Bitcoin sales, creating additional downside pressure on BTC. The concern intensified after Strategy sold 32 BTC and $128 million in shares, breaking its long-standing buy-and-hold image and helping trigger a broader selloff. Bitcoin has fallen about 16% since the sale, while Strategy’s stock is down nearly 13% to a two-month low. Analysts say the key issue is how the company balances dividend obligations against its Bitcoin treasury. Some see a more diversified corporate ownership base for Bitcoin as healthier over the long run, but near-term volatility may rise if Strategy is forced to keep selling.
