The strategy remains under pressure as bitcoin hovers near $60,000, but recent capital moves have bought the company time, according to Jim Ferraioli, director of cryptocurrency research and strategy at the Schwab Center for Financial Research.
Speaking on Morning Trade Live at the New York Stock Exchange, Ferraioli He said The Michael Saylor-led company faces scrutiny while Bitcoin’s price is 50% below its peak. Strategy, the largest holder of Bitcoin, has funded much of the purchases through preferred stock, including its extended variable rate preferred stock, known as STRC.
This product fell to approximately $70 from its face value of $100 before rebounding. To defend the peg, the strategy raised STRC’s dividend to 12% and It approved $2 billion in buybacks While opening more Bitcoin sales. The stock has since begun to rise towards the nominal level.
“The market supports these measures,” Ferraioli said, describing the response as curbing fears of successive liquidations.
The shift represents a change in tone for a company known for its “never sell” attitude.
“We went from never selling Bitcoin to selling Bitcoin strategically,” Ferraioli said, acknowledging the fair criticism. He warned that a lower multiple could limit the strategy’s ability to issue shares and buy more bitcoin in the second half of the year.
Schwab’s view on Bitcoin’s decline
Ferraioli weighed in on the market bump that followed comments from President Trump, who… Referred openness To keep Bitcoin in Trump’s new savings account savings program.
Ferraioli read the move as a sign of another potential class of buyers, besides the major investors who entered through spot ETFs.
“The cryptocurrency market loves narratives,” he said, describing the asset’s momentum as momentum.
Regarding correlations, Ferraioli described Bitcoin as a low-correlated asset, a trait he attributed to the four-year halving that reduced new supply. Previous relationships with technology stocks have collapsed, and the historical inverse relationship with the dollar has fluctuated; Bitcoin rose During periods of dollar strength this year.
“The starting points are important,” he said, noting that Bitcoin rose during the Iranian conflict as the dollar rose.
He spoke about the dollar/yen rate, which is trading near its lowest levels in 40 years. A stronger yen could unwind carry trades, where investors sell the yen to buy growth assets. Ferraioli framed the yen’s rebound as a potential headwind for risk assets, though not a fundamental near-term risk for Bitcoin.
Regarding the put trade, Ferraioli pushed back on the idea that gold’s rise last year, versus Bitcoin’s market value halving, refuted the store of value case.
He attributed gold’s movement to supply and momentum constraints and not to financial fear. The federal budget deficit has shrunk from 8% to 9% of GDP to 5%, near the average over Bitcoin’s lifetime.
“This is not an endorsement of fiscal health, but it helps put that narrative in check,” he said.
