Strategy Inc.'s $4 Billion Cash Reserve Can't Save It From Third Confrontation With $105 Resistance
Strategy Inc., the NASDAQ-listed company that has been at the center of the Bitcoin market, is up 5% on Friday as it attempts to break above its long-standing resistance level of $105 for the third time. This development comes after a recent report by options analytics firm SpotGamma revealed that Strategy had stopped buying Bitcoin and started selling it, marking a significant shift in the company's strategy.
The report explained that Strategy's model, which involved raising cheap money from Wall Street to buy Bitcoin and then using those gains to fund its dividend payments, had broken down. With Wall Street no longer believing MSTR would shoot up again, Strategy was unable to raise cheap money as it once did, leading to a loss of $1.76 billion in annual dividend payments.
This has forced Strategy to sell 3,588 Bitcoin coins at an average price of $60,197 each, taking a significant loss against its previous purchase price of $75,476. The company has also built up a cash reserve of $4 billion to cover these losses.