Grayscale says Strategy bitcoin sale may reduce tail risks for BTC
Schwab’s Jim Ferraioli said Strategy’s dividend increase, buybacks and willingness to sell bitcoin have helped steady concerns around STRC, though lower valuation multiples could still constrain future buying capacity.
Strategy remains under pressure with bitcoin near $60,000, but recent capital measures have bought the company time, Charles Schwab’s Jim Ferraioli said, describing market reaction as supportive of steps taken to ease fears around financing stress and cascading liquidations. Strategy, the largest corporate holder of bitcoin, has relied heavily on preferred equity including its variable-rate STRC security, which fell near $70 from its $100 par value before rebounding after the company raised the STRC dividend to 12%, authorized $2 billion in buybacks and opened the door to further bitcoin sales. Ferraioli said the shift from a long-standing “never sell” posture to more strategic bitcoin sales has drawn fair criticism, and warned that a lower valuation multiple could reduce Strategy’s ability to issue shares and buy more bitcoin in the second half. He also said bitcoin remains a momentum-driven, low-correlation asset, with traditional relationships to tech stocks and the dollar proving less reliable this year, while a yen carry-trade unwind could be a headwind for risk assets but not his primary near-term concern for bitcoin.
- tail risk: The chance of a rare but severe negative market event, such as forced selling or a sharp dislocation.
- cascading liquidations: A chain of forced asset sales that can amplify market declines and volatility.
- carry trade: A strategy in which investors borrow or sell a low-yielding currency to buy higher-return assets.