Strategy Buys Bitcoin Based on Capital Costs, Not Price
Strategy's CEO Phong Le explained that his company's decision to buy Bitcoin (BTC) is based on capital costs, not market price. Strategy had paused its BTC purchases for 10 weeks to shore up its balance sheet. Le compared the calculation behind the resumed buys to financing a data center buildout.
Land and energy costs have increased, while the cost of raising capital remains low, according to Le. He stated that the trade only works when selling shares or debt costs less than BTC's expected return. Strategy ranked fourth among public companies for equity capital raised this year, behind SpaceX, Google, and Intel.
Le emphasized that Strategy has a 'two-way strategy' regarding its Bitcoin holdings. The company sold about 7,000 BTC earlier this year to fund dividends and buybacks. He argued that debt holders and ratings agencies expect companies to sell assets when needed, calling it a sign of a 'fully operating' company.
Le expects Bitcoin's rally to continue beyond current levels and would keep buying at various price points, including $80,000, $90,000, and even a potential all-time high of $130,000. He believes that today's purchases would be justified if BTC later reaches $260,000.