Strategy Builds $1.44B Cash Reserve to Protect Dividends While Cutting Bitcoin Price Outlook

Source: CoinEdition Original Title: Saylor’s Strategy Builds $1.44B ‘Cash Moat’ to Protect Dividends, Cuts Bitcoin Outlook Original Link: https://coinedition.com/strategy-builds-usd-reserve-dividend-payouts-bitcoin-forecast-cut-mstr/

Key Highlights

• Cash reserve is intended to support dividend payments on the company’s preferred stock and cover interest on its outstanding debt
• Fund is meant to pay out dividends for at least a full year, with a goal to grow it enough to cover two years or more
• Strategy also bought more Bitcoin, adding about 130 coins at a price of roughly $89,860 each, bringing its total Bitcoin holdings up to 650,000

Decoupling from Bitcoin Volatility

Strategy (formerly MicroStrategy) effectively decoupled its shareholder payouts from Bitcoin’s volatility since December start, establishing a $1.44 billion USD reserve to service its growing debt and preferred stock obligations.

The ‘Stability’ Reserve

The reserve was funded via proceeds from the sale of Class A common shares under Strategy’s at-the-market offering program. According to management, the fund is meant to pay out dividends for at least a full year.

The goal is to expand this coverage to two years. By holding fiat liquidity, Strategy ensures it never faces a “forced sell” scenario to pay yields, even if Bitcoin enters a prolonged bear market.

Bitcoin Accumulation Slows

While building its cash wall, Strategy still maintained its Bitcoin accumulation mandate, albeit at a reduced velocity. The treasury acquired 130 BTC for approximately $11.7 million, paying an average of $89,860 per coin.

This purchase brings total holdings to 650,000 BTC, roughly 3.1% of the total Bitcoin supply.

Despite the slowdown, Founder Michael Saylor reiterated the firm’s long-term thesis in a recent interview, predicting Bitcoin will eventually flip gold’s market capitalization within the decade.

Bitcoin Forecast Slashed on Market Reality

Because Bitcoin’s price has been swinging sharply recently, the company has lowered its 2025 forecast. Instead of predicting a specific $150,000 price by year’s end, it’s now using a more cautious range of $85,000 to $110,000.

Based on the new Bitcoin price forecast, Strategy’s annual profit could end up anywhere from a loss of about $5.5 billion to a profit of around $6.3 billion. The company also lowered its target return from holding Bitcoin to 22-26%, down from 30%.

Strategy admits that its profits are still very much tied to Bitcoin’s price. Because it must report its crypto holdings at current market value, if Bitcoin finishes the year outside their estimated $85,000 to $110,000 range, the final profit or loss number could be very different.

Long-Term Conviction Remains

Despite the volatility and updated guidance, Strategy continues to portray itself as a “Bitcoin treasury company,” committed to accumulating Bitcoin over time. In recent interviews, Michael Saylor, the firm’s co-founder, repeated his view that Bitcoin will become more valuable than gold in the next ten years, showing his continued strong belief in it as a way to preserve wealth.

Strategy remains the biggest corporate holder of Bitcoin in the stock market as its 650,000 BTC represent about 3.1% of the total supply.