:max_bytes(150000):strip_icc()/GettyImages-2217059347-a81d02e05f6a4418abbfbc2da79dff1a.jpg "Strategy’s Michael Saylor Says ‘We Are Not Going To Be Selling’ as Company Buys More Bitcoin")
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Key Takeaways
- Strategy recently acquired 1,142 more bitcoin for $90 million. The price of the cryptocurrency was recently around $69,000.
- The broad sell-off in tech and metals last week does not bode well for risk assets like crypto in the near term, experts say.
Strategy is down on its bitcoin purchases—but it’s not out.
Executive chair and bitcoin evangelist Michael Saylor in a Tuesday interview with CNBC said that Strategy (MSTR) is “not going to be selling” bitcoin anytime soon—and will continue to buy the world’s largest cryptocurrency every quarter “forever.” The price of the coin is hanging out under $70,000 after last week’s sell-off, which took it close to $60,000.
Crypto-linked stocks are mixed Tuesday, with Coinbase (COIN) and Strategy down slightly. Circle (CRCL) has risen by more than 2%. Read Investopedia’s full coverage of today’s trading here.
That the Strategy chair is vowing not to sell means the company is willing to hold its breath; to bow out now would mean locking in losses with the price of bitcoin below its average cost per coin. At what price buyers will be drawn back in en masse is anyone’s guess, but it would appear that the mid-$70,000s wasn’t the value zone some experts hoped it would be.
WHY THIS MATTERS TO YOU
Bitcoin is off last week’s lows, offering some relief to crypto investors. But some experts think crypto may not have much room for upside if investors are concerned about risk assets, such as tech stocks, broadly.
Strategy recently bought an additional 1,142 coins for about $90 million for an average cost of more than $78,000. Crypto experts say that wavering tech stocks don’t bode well for risk assets at large.
When Saylor was asked about investor concerns that Strategy might be forced to sell—in the event that bitcoin prices fall sharply and don’t recover for years—he was sanguine. “If bitcoin falls 90% for the next four years, we’ll just refinance the debt,” he said, adding that Strategy has enough in its cash reserves to pay dividends on its bitcoin-backed high-yield perpetual preferred shares like “STRC,” and cover its debt, for more than two years.
The “only thing” investors need to know, Saylor said in the CNBC interview, is that bitcoin would do double to triple the performance of the S&P 500 over the next four to eight years.
Galaxy Digital’s (GLXY) trading expert Beimnet Abebe said that the short-term does not look great for bitcoin given “the pretty bad setup for risk” and the losses investors suffered last week as other parts of the investment complex including tech stocks and metals took a beating. Plus, investors appears to be in portfolio-tweaking mode, and their “flight to value” in stocks doesn’t exactly put bitcoin in that line of sight.
“Who’s going to want to buy crypto when they’re worried about the Nasdaq?” he said on the “Galaxy Brains” podcast last week.
