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According to Odaily, Strategy CEO Phong Le stated that the company’s newly established $1.4 billion dividend reserve fund can be used to pay dividends and interest during periods of market volatility, helping to avoid being forced to sell bitcoin due to short-term funding needs. This reserve was raised through stock issuance and is expected to cover about 21 months of dividend payments, potentially extending to two years, allowing the company to avoid tapping into its approximately $59 billion bitcoin holdings.

Le said the company does not wish to sell BTC when its valuation is below the value of its bitcoin assets, with the goal of “permanently and continuously paying dividends.” To reduce the risk of being forced to sell coins, the company may even consider lending out part of its bitcoin in the future to generate additional income. He pointed out that as more traditional financial institutions enter the sector, bitcoin lending is becoming a viable option.

Since Strategy shifted to a bitcoin balance sheet model in 2020, the company has experienced significant stock price surges and corrections. The current mNAV is about 1.17, raising market concerns about the risk of its asset value being inverted. The latest move is seen as a response to the pressure on its digital asset treasury model. (Bloomberg)