Saylor says Strategy may Sell Bitcoin to Inoculate Market

Strategy executive chairman Michael Saylor said his firm could sell Bitcoin to “inoculate” the market against sudden panic or to reinforce confidence in the company, in contrast to its long-standing “never sell” Bitcoin strategy.

“We’ll probably sell some Bitcoin to fund a dividend, just to inoculate the market, just to send the message that we did it,” Saylor said during the Strategy’s first-quarter earnings call on Tuesday.

Market participants will realize that “the company’s fine, the Bitcoin’s fine, the industry’s fine, the world didn’t come to an end,” Saylor said after Strategy reported a $12.5 billion net loss, driven mostly by unrealized losses on its Bitcoin (BTC) holdings as Bitcoin fell 23.8% in the first quarter.

Michael Saylor (top left) speaking during Strategy’s Q1 earnings call. Source: Strategy

Strategy has been a consistent Bitcoin buying force since August 2020, when it began its strategy of holding Bitcoin as a primary treasury asset. 

In February, Saylor dismissed concerns that the company could be forced to sell its holdings during a crypto market downturn, telling CNBC’s Squawk Box, “I expect we’ll buy Bitcoin every quarter forever.” 

Saylor also said Strategy could withstand an extreme drawdown in Bitcoin’s price to as low as $8,000 and still cover its debt obligations without needing to sell.

Saylor wants Stretch to be world’s biggest credit instrument

Strategy has been leaning on dividend-paying perpetual preferred stock offerings like Stretch (STRC) to fund its Bitcoin purchases in recent months.

Stretch has helped Strategy fund a large portion of the 145,834 Bitcoin it has bought this year, bringing its total holdings to 818,334 Bitcoin, worth $66.7 billion. 

Saylor said Strategy is aiming to build Stretch into the “biggest credit instrument in the world,” adding that as its assets under management grow, liquidity will increase, enabling broader adoption and creating a “network effect.”

Saylor hopeful neobanks will build Bitcoin credit products

Saylor said several Bitcoin-focused decentralized finance protocols, including Pendle and Saturn, have started tokenizing STRC’s 11% monthly dividends, allowing them to be traded and improving liquidity for Bitcoin-backed credit. 

Saylor added that he is hopeful that a neobank will start offering Bitcoin-backed “digital yield accounts” in the near future.

“We had none of these conversations going on eight weeks ago or 12 weeks ago, and now I see like three dozen initiatives,” Saylor said.

Related: Capital B raises $1.3M from Adam Back for Bitcoin strategy

Saylor said Bitcoin-backed digital yield accounts could offer investors up to 8%, arguing that they are far more lucrative than what many stablecoins offer.

“Check back in 12 more weeks, I think we’ll have some exciting news,” Saylor said of the broader Bitcoin credit market.

Meanwhile, MSTR fell 4.33% in after-hours trading to $178.80 on Tuesday after the company reported its first-quarter earnings.

Strategy is on track to record a stronger second-quarter performance, with Bitcoin up nearly 20% to $81,250 since April 1.

Magazine: Adam Back says current demand is ‘almost’ enough to send Bitcoin to $1M

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