Strategy Pauses Bitcoin Purchases Amid Shift in Fundamentals

Strategy has paused buying Bitcoin for four consecutive weeks, its longest streak in two years. The company's last purchase was in the week ending June 21, and since then it has sold 3,588 BTC in two tranches between June 29 and July 5 for about $216 million to fund preferred stock dividends and boost its cash reserve.

The sale topped up Strategy's cash reserve to $3.225 billion by July 20. The company's management had cited a breakeven point of around 1.22 for the stock's premium over Bitcoin holdings, known as mNAV. However, in late June, mNAV dipped to roughly 0.99 before recovering to about 1.03.

Strategy posted a $14.5 billion operating loss in the first quarter on Bitcoin's mark-to-market decline. The company's second-quarter earnings are due on Thursday, July 30, and will test whether the buying freeze holds. LSEG's consensus estimate points to a swing back to $3.86 billion in Q2 operating income.