Strategy (MSTR), the largest public holder of bitcoin , won’t panic unless BTC sinks to the $8,000-$10,000 range, its CEO has said.
Phong Le identified that range as when the company “would have to consider some of the risk associated with our debt,” in an interview with Bloomberg TV on Tuesday.
Such a drop would represent a drop of around 85% based on bitcoin’s current price of around $64,500 as of writing.
“Until that point in time, we feel very secure about the balance sheet,” Le said. “What we need to do is build a capital structure that can withstand bear markets and of course benefit from bull cycles.”
Strategy’s preferred stock STRC, which is designed to give it the cash flow to fund its bitcoin buying in return for a regular dividend — currently a 13% annual yield, has been under pressure in recent months. The stock is designed to maintain a $100 par, which it lost in April and falling below $75 in late June.
When STRC falls below $100, it restricts Strategy’s ability to issue new shares and then use the cash to buy bitcoin.