TechFlow news, July 18, according to The Block, CryptoQuant Head of Research Julio Moreno stated that Strategy's newly launched digital credit capital framework has largely alleviated short-term liquidity issues, but the company still needs to establish a systematic Bitcoin buying timing model, as well as a disciplined framework for partial reduction or hedging during bull market uptrends.
Strategy announced the framework on June 29, including establishing a USD reserve covering at least 12 months of preferred stock dividends and interest expenses, increasing the STRC preferred stock dividend rate to 12%, and authorizing up to $1 billion in preferred stock repurchases and $1 billion in MSTR common stock repurchases. The company can also raise up to $1.25 billion by selling Bitcoin to supplement cash reserves, pay dividends and interest, or implement stock repurchases.
From June 29 to July 5, Strategy sold approximately 3,588 Bitcoins, raising approximately $216 million to pay preferred stock dividends and supplement reserves; in the following week, the company raised another $466.7 million by selling MSTR stock, during which no further Bitcoin trading occurred. Its USD reserves increased from $1.44 billion to $3 billion, the dividend coverage period increased from approximately 14 months to 29 months, while Bitcoin holdings remained at 843,775 coins.
Moreno pointed out that the current framework mainly stipulates how the company finances itself, and does not specify when to resume buying Bitcoin, nor does it establish rules for strategic reduction, hedging, and deleveraging at cycle highs. Although the STRC price has rebounded from a historical low of approximately $75 at the end of June to approximately $88, it remains below the $100 par value, indicating that the market is still observing whether Strategy can consistently execute the new capital discipline.
