Strategy Aims for $10 Billion in Annual Digital Credit Issuance Using Bitcoin Collateral

Strategy, the world's largest corporate Bitcoin holder, is looking to expand its digital credit business by leveraging its vast Bitcoin holdings as collateral. According to a recent investor presentation, Strategy currently holds approximately 4% of the total Bitcoin supply, which translates to around 840,447 Bitcoins as of August 9.

The company plans to issue digital credit products worth between 10% and 20% of the value of its Bitcoin holdings, depending on market conditions. This would result in an annual issuance of $5.4 billion to $10.8 billion in credit products.

Strategy also aims to increase its long-term Bitcoin holdings through capital markets instruments such as corporate bonds and preferred stock.

The company has identified key risks associated with this strategy, including Bitcoin price volatility, weaker funding conditions, and a decline in the mNAV (market net asset value) ratio.