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Premium Narrowing, Financing Difficulties Rising
Strategic Adjustments and Market Perspectives
Premium Narrowing, Financing Difficulties Rising
According to data, since November 20, 2024, the stock price of Strategy has fallen by 22%, while Bitcoin has risen by 23% during the same period, leading to a significant narrowing of the premium space between the stock price and the net asset value of Bitcoin.
This has weakened the company’s ability to raise funds through issuing new shares at high valuations. Recently, on the week of August 17, Strategy purchased 430 Bitcoins worth $51.4 million, an increase from 155 Bitcoins the previous week, but the overall pace of accumulation has slowed compared to previous years.
The company currently holds approximately $72 billion in Bitcoin, remaining one of the largest institutional holders globally.
Strategic Adjustments and Market Perspectives
Brian Dobson, Executive Director of Clear Street, believes that the new regulations will allow Strategy to buy Bitcoin more strategically when favorable market opportunities arise. Conversely, some market participants warn that this move will increase risks for shareholders. As the stock price no longer needs to maintain a high premium, the company could issue shares to raise funds at lower prices, which may lead to shareholder dilution. More importantly, if Bitcoin prices experience a pullback, Strategy will face a dual blow of “asset shrinkage + equity expansion.” Noted short-seller Jim Chanos remarked that the company’s pace of Bitcoin purchases has significantly declined, and the original 2.5 times mNAV lower limit has effectively been removed.
Overall, this change means that Strategy’s financial structure will be more highly tied to the long-term trends of Bitcoin. In other words, the company is betting more risk on Bitcoin’s long-term appreciation; if the market continues to strengthen, it will further solidify its position as a “corporate-grade Bitcoin vault”; but if the market reverses, the financial pressures will be magnified.
