Strategy Builds $1.44 Billion USD Reserve To Counter Market Concerns And Bitcoin Downcycle

Strategy moved to calm market uncertainty by creating a USD reserve worth $1.44 billion, a move designed to reassure investors during a period of Bitcoin weakness. Chief executive Phong Le discussed the decision on CNBC and framed the capital raise as a direct response to concerns about debt coverage, dividend sustainability and overall balance sheet strength.

Good to Know

• Strategy raised $1.44 billion through a stock sale and placed the funds in a new USD reserve.
• The reserve is meant to support at least 12 months of dividends, expanding later to a 24-month buffer.
• A new BTC Credit dashboard now claims the firm holds enough assets for more than 70 years of dividend coverage.

Phong Le described the initiative as a way to clear doubts about stability during the ongoing Bitcoin slump. He told CNBC:

“We’re very much are a part of the crypto ecosystem and Bitcoin ecosystem. Which is why we decided a couple of weeks ago to start raising capital and putting US dollars on our balance sheet to get rid of this FUD.”

On Monday, the company announced the formation of the $1.44 billion reserve, explaining that the fund initially covers at least 12 months of dividend obligations and will eventually support a 24-month runway. The move followed a stretch of market debate over whether the company could continue to pay dividends and service debt if weakness in its stock persisted.

During Power Lunch, Le expanded on this point.

“And it’s really this FUD. We weren’t going to have an issue to be able to pay our dividends, and we weren’t likely going to have to tap into selling our Bitcoin, but… There was FUD that was put out there that we wouldn’t be able to meet our dividend obligations, which causes people to pile into a short Bitcoin bet.”

He went on to note the speed and scale of the capital raise:

“We just addressed that in eight and a half days we raised $1.44 billion — 21 months’ worth of dividend obligations, and we did it 1) to address the FUD, but 2) to show people that we’re still able to raise money in a Bitcoin downcycle.”

Reserve Strategy And Long-Term Outlook

Last week, Le indicated that Strategy would consider selling Bitcoin only under specific conditions, including a fall in the stock price below net asset value and a lack of access to fresh capital markets.

The firm also introduced a BTC Credit dashboard, which states that current assets could cover dividends for more than 70 years. The dashboard is presented as a transparency tool intended to show long-term financial capacity and mitigate speculation around future payouts.

FAQ

Why did Strategy raise $1.44 billion?

To build a USD reserve aimed at calming concerns about dividend coverage and debt servicing during a Bitcoin downturn.

How quickly was the capital raised?

Le said the company completed the raise in eight and a half days.

Will the reserve expand further?

Yes. The initial target covers 12 months of dividends, with plans to grow it to 24 months.

Would Strategy sell Bitcoin to protect dividends?

Le said this would be considered only if shares traded below net asset value and new capital was no longer available.

What does the BTC Credit dashboard claim?

It reports that Strategy currently holds enough assets to fund dividends for more than 70 years.