Samson Mow

Strategic Bitcoin Sales Boost Shareholder Protection and Flexibility

Strategy selling Bitcoin isn't a bad thing. There are differing schools of thought on this topic, but I actually think Bitcoin Treasury Companies should sell Bitcoin when it is warranted. The goal shouldn't be to never sell Bitcoin, but to benefit and protect shareholders. 1⃣ Never selling limits optionality. Public markets are war. In war, you need all available tools at your disposal. "Hence that general is skillful in attack whose opponent does not know what to defend; and he is skillful in defense whose opponent does not know what to attack." The more tools @Strategy holds, the fewer angles its adversaries have. A company with real optionality is hard to game: it might sell, might hedge, might issue, might buy. A company that has publicly vowed to only ever do one thing has handed a map to short sellers and arbitrageurs. Every limit Saylor takes off the table, the other side loses a weapon. If you look at @adam3us's BSTR, they explicitly told investors that if shares trade below mNAV, selling Bitcoin to buy back stock is on the table. 2⃣ Even the #BitcoinBonds I designed had scheduled BTC sales baked into the design. After a five-year lockup, the issuer begins selling Bitcoin to return capital and share appreciation with bondholders. Without that mechanism, the instrument could not function. Strategy's $STRC is the same idea as Bitcoin Bonds in a different wrapper. Both instruments strip out Bitcoin's volatility and share the upside with investors who want the asymmetry without the drawdowns. Even with scheduled Bitcoin sales in the Bitcoin Bond structure, the issuing nation-state still ends up a net accumulator of BTC. It's the same case for Strategy. 3⃣ If you were paying attention to what Saylor has been posting, you'd see this coming. In April he said: "Our BTC Breakeven ARR is ~2.05%. If Bitcoin grows faster than that over time, we can cover our dividends indefinitely without issuing new $MSTR shares." This implies that Bitcoin can cover dividends, which means selling Bitcoin to cover dividends. 4⃣ What about "you do not sell your Bitcoin?" As an individual HODLer you shouldn't sell your Bitcoin for no reason. Avoid selling if you can. That is the message. It is not literally 'never sell and take it to the grave.' You should of course sell it (use it) for important things in your life. Never sell is a rule of thumb, not a blood oath. BTCTCs need the option to sell Bitcoin when needed. Selling Bitcoin doesn't impact the incredible success that Strategy and STRC are seeing.