Strategy Sold Bitcoin at $60,000 and Bought it at $80,000

▲ Strategy (MSTR), Bitcoin (BTC), Dollar (USD)/AI Generated Image ©

A point has been raised that it is better for investors to directly hold BTC rather than shares of related companies if they want to invest in Bitcoin, citing the case of Strategy, a leading Bitcoin (BTC) treasury strategy company, which sold Bitcoin at approximately $60,000 and repurchased it at around $80,000 just a few weeks later.

According to the investment media The Motley Fool on September 12 (local time), Strategy (formerly MicroStrategy) sold BTC four times between June 30 and August 10. The selling prices ranged from $59,256 to $64,262, roughly around $60,000. Subsequently, on August 31, after several weeks, it resumed buying Bitcoin, purchasing BTC at $80,318. Consequently, looking at that period alone, it was a transaction of selling low and buying high.

The background for Strategy's BTC sale was a need for funds. The company had to dispose of some of its held Bitcoin to cover operating expenses and fulfill payment obligations related to preferred stock issuance, and it had no choice but to accept the price formed in the market at that time. The Motley Fool evaluated this as an example showing the risks inherent in the business model of Bitcoin treasury strategy companies. While the strategy can be effective when BTC prices are continuously rising, the business model can be pressured when prices fall or trade sideways, as they did in June and July.

Indeed, the stock prices of many Bitcoin treasury strategy companies are also showing sluggish trends. Some companies are trading at a lower enterprise value than the combined value of their held BTC, and there are cases of companies winding up their businesses or shifting direction to other high-growth areas such as artificial intelligence (AI). Some are also integrating with larger Bitcoin treasury strategy companies. Over the past year, Strategy's stock price has fallen by 58%, Twenty One Capital by 71%, and Strive by 78%.

The media predicted that the business model of Bitcoin treasury strategy companies would be under significant pressure until the Bitcoin price recovers. At the time of the report, BTC was trading at $77,194, with a 52-week trading range of $57,945.16 to $126,079.89. While Bitcoin treasury strategy companies have sometimes recorded higher returns than BTC itself for a period, it is pointed out that if they have to sell assets for fundraising or operations during a price decline, the pure exposure effect to Bitcoin price increases could be weakened.

Therefore, The Motley Fool assessed that for investors looking to invest in BTC's future upside potential, it is currently better to buy BTC directly than through Bitcoin treasury strategy companies. The key is that, like in Strategy's case, companies have variables such as operating expenses, fundraising, and payment obligations that Bitcoin itself does not. The media suggested that in the long term, it would be difficult for Bitcoin treasury strategy companies to consistently outperform Bitcoin itself.

*Disclaimer: This article is for investment reference only, and we are not responsible for investment losses based on it. The content should be interpreted for informational purposes only.*