Zach Pandl, head of research at Grayscale, stated that Strategy's recent funding and holding pressures are amplifying volatility in the Bitcoin market. The trigger was the company's disclosure on June 1st that it had sold 32 Bitcoins. Although the amount was small, this action altered some market expectations.
The sale of 32 units has attracted attention.
Strategy has long been considered one of the most steadfast corporate buyers of Bitcoin, so even a small reduction in holdings is easily amplified and interpreted by the market. Grayscale believes that what truly caused the volatility was not the size of the sale, but rather that the transaction made investors question whether Strategy could maintain its past buying momentum.
According to reports, Strategy currently holds over 818,000 Bitcoins, with a position valued at nearly $55 billion based on recent prices. Market estimates generally place its average purchase price at approximately $75,500 to $75,700 per Bitcoin. If the price of Bitcoin were to fall to around $62,000 or lower, the company's unrealized losses would be between $11 billion and $12 billion.
STRC's financing model is under pressure.
Market attention has also shifted to Strategy's variable-rate perpetual preferred stock instrument, STRC. The product targets a price of approximately $100 per share and currently offers a dividend yield of 11.5%. Grayscale notes that as dividend burdens increase, Strategy's space to efficiently raise funds through preferred stock issuance and reinvest those funds in Bitcoin may be narrower than before.
Some critics argue that if the preferred stock continues to expand, the annual dividend burden could exceed $1 billion. This would increase its financial burden and potentially undermine market confidence in its "continuous buying" model. Supporters, however, believe that Strategy can still access capital markets for funding, and that Bitcoin volatility is part of its long-term strategy.
The unrealized losses of similar companies are widening.
The report also mentioned that the pressure is not limited to Strategy alone. Several companies that rely heavily on digital assets in their asset portfolios have recently experienced significant book losses.
- Strategy's unrealized Bitcoin losses amount to approximately $11.07 billion.
- Bitmine's unrealized losses on Ethereum amount to approximately $9.58 billion.
- Metaplanet's Bitcoin losses amount to approximately $1.38 billion.
Grayscale believes that in the long run, if Bitcoin is no longer highly concentrated on the balance sheets of highly leveraged companies, but rather dispersed across the holdings of more companies, the market structure could be more stable. However, in the short term, new buying is still needed for Bitcoin to form a more solid bottom.
Besides corporate holding pressure, Bitcoin has recently been affected by factors such as weak ETF inflows, decreased market liquidity, and some funds shifting to AI stocks. Grayscale expects Bitcoin to still have room for recovery in the coming months, but its short-term performance may lag behind some crypto sectors that benefit more directly from regulatory clarification.
