Bitcoin\u2019s next major leg down might not come from miners, ETF exodus, macro data, unknown large whales, or even wars and worsening economic conditions. Instead, it could be from the market\u2019s largest and most famous corporate BTC buyer if it indeed turns into a recurring seller, as many critics and experts fear.<\/p>\n
As such, we decided to ask ChatGPT about its take on the matter: how viable is the threat, and how low can BTC go if Strategy indeed begins disposing of some of its crypto holdings to pay off dividends or other expenses?<\/p>\n
Consistent crypto critic Peter Schiff is not the only person who has sounded the alarm<\/a> on Strategy\u2019s strategy (no pun intended) to raise funds through its STRC to accumulate more bitcoin. Just earlier, we reported that a popular crypto analyst, Kaleo, warned that the company would need to sell at least 50,000 bitcoin in the next couple of years to fund dividend payments and other expenses.<\/p>\n ChatGPT warned that if the largest corporate holder of BTC indeed starts offloading more significant portions, not just the 32 units it sold<\/a> several weeks ago, the initial market shock could send the asset tumbling toward multi-year lows at $52,000. That would be just the base-case scenario and first reaction, before a more profound correction driven by a deeper loss of confidence in Strategy\u2019s capital structure could tumble bitcoin toward $45,000.<\/p>\n The popular AI solution noted that it\u2019s highly unlikely that Strategy will offload \u201chundreds of thousands of coins,\u201d but the real danger for the asset\u2019s price will stem from the narrative shift.<\/p>\n \u201cFor years, Strategy was the market\u2019s most reliable corporate buyer of bitcoin. When BTC dipped, investors expected Michael Saylor\u2019s company to raise capital and buy more. That created a psychological floor. If the same market starts believing Strategy must sell BTC to service its own financial instruments, that floor can quickly turn into resistance.\u201d<\/p>\n Also referred to as Stretch, STRC is the company\u2019s variable-rate perpetual preferred stock. Simply put, investors buy STRC for cash yield, while Strategy uses the capital raised through the instrument to support its bitcoin-focused balance sheet. It\u2019s designed around a $100 stated amount.<\/p>\n The company can adjust the dividend rate to keep STRC trading close to that level. When the shares trade near or above $100, the model operates as designed: the company can issue more preferred shares through at-the-market programs, raise cash, buy more BTC, and keep the machine working.<\/p>\n When that $100 par breaks, the structure is in danger. At current prices of under $90, STRC is no longer behaving like a stable high-yield instrument. Instead, it trades at a meaningful discount relative to the level the firm wants to hold, creating several issues.<\/p>\n Strategy\u2019s ability to issue more STRC becomes weaker as selling new shares below the intended $100 zone would violate the product\u2019s design or signal that investors are demanding a much larger discount.<\/p>\n Additionally, the dividend rate may need to rise to attract buyers back. Lastly, instead of using STRC proceeds to buy more BTC, Strategy may have to utilize its cash reserves, common-stock sales, or, as threatened above, BTC sales, to keep dividends current.<\/p>\n The post What Happens to Bitcoin\u2019s Price if the Biggest Corporate Buyer Becomes a Seller?<\/a> appeared first on CryptoPotato<\/a>.<\/p>","protected":false},"excerpt":{"rendered":" Bitcoin\u2019s next major leg down might not come from miners, ETF exodus, macro data, unknown large whales, or even wars and worsening economic conditions. Instead, it could be from the market\u2019s largest and most famous corporate BTC buyer if it indeed turns into a recurring seller, as many critics and experts fear. As such, we […]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-184184","post","type-post","status-publish","format-standard","hentry","category-discovery"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/184184"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=184184"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/184184\/revisions"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=184184"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=184184"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=184184"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Why STRC Matters<\/h2>\n