In the United States, Strategy, formerly known as MicroStrategy, has made a significant shift in its approach to Bitcoin holdings. In late June 2022, the company announced plans to sell up to $1.25 billion in Bitcoin to bolster its cash reserves and avoid issuing more equity. This decision came after a challenging year for the crypto market, which saw Bitcoin's price drop over 43% and Strategy's stock plummet more than 37%. The company had previously adopted a strategy of accumulating Bitcoin, with executive chairman Michael Saylor being a prominent advocate for the cryptocurrency. However, the recent market downturn forced Strategy to reconsider its position. In June, the company sold 32 Bitcoin, valued at approximately $2.5 million, as part of its efforts to stabilize its finances. The sales represent a stark contrast to Saylor's earlier statements, where he emphasized the importance of holding onto Bitcoin. The company's holdings, which had grown to around $52 billion, accounted for about 4% of the total Bitcoin supply. The decision to sell Bitcoin has raised concerns among investors, especially as Saylor had previously stated, 'You do not sell your Bitcoin.' The market's volatility has led to significant liquidation events, with over $19 billion in leveraged positions disappearing in October 2022. As a result, Strategy's perpetual preferred stock, STRC, has also faced challenges, breaking its $100 peg. The company has relied on funds raised from selling STRC to finance new Bitcoin purchases and cover interest payments to creditors. As of now, STRC trades at $89, reflecting the ongoing pressures in the cryptocurrency market.
