Crypto treasury firm Strategy (NASDAQ: $MSTR) says it should remain “very secure” unless Bitcoin’s (CRYPTO: $BTC) price falls to $10,000 U.S. or lower.
In a media interview, Strategy Chief Executive Officer (CEO) Phong Le said the largest public holder of Bitcoin won’t panic unless BTC’s price falls below $10,000 U.S.
Bitcoin is trading at $64,800 U.S. on July 15, down from an all-time high of $126,000 U.S. reached last October.
In an interview with Bloomberg TV, Le said that a decline to $10,000 U.S. would represent a fall of 85% from Bitcoin’s current price.
“Until that point in time, we feel very secure about the balance sheet,” said Le. “What we need to do is build a capital structure that can withstand bear markets.”
Le’s interview comes with Strategy under fire for selling some of its Bitcoin holdings in recent weeks, and as the company’s preferred stock (NASDAQ: $STRC) runs into trouble.
Strategy’s preferred stock is designed to give the company the cash needed to fund its Bitcoin buying in return for a bi-monthly dividend that yields 13%.
However, the preferred stock has been under pressure, losing its $100 U.S. par value and falling below $75 U.S. in late June, raising eyebrows among investors.
When STRC falls below $100 U.S., it hurts Strategy’s ability to issue new shares and then use the cash to buy more Bitcoin.
Consequently, Strategy has been forced to sell hundreds of millions worth of BTC to fund the dividend on the preferred stock.
Le said that increasing Strategy’s U.S.-dollar reserves should help STRC’s recovery back to around $90 U.S.
“We’ve learned over the last couple of months that having that liquid access to U.S.-dollar capital is quite important,” he said. “So, we’ll continue to build that.”
MSTR stock has fallen 77% in the last 12 months to trade at $101.14 U.S. per share. The preferred stock is currently trading at $88.36 U.S. a share.
