Strategy Inc. has temporarily suspended Bitcoin purchases, increasing its cash reserves to $2.19 billion, possibly in preparation for a prolonged downturn in the cryptocurrency market.
The Tysons Corner, Virginia-based company raised $748 million through the sale of common stock for the week ending December 21, 2023, according to a Monday filing with the U.S. Securities and Exchange Commission. This pause follows approximately $2 billion in Bitcoin purchases over the previous two weeks, bringing the company's total holdings to approximately $60 billion.
In early December, Strategy created a $1.4 billion reserve specifically earmarked for future dividend and interest payments, addressing concerns that the company might be forced to sell Bitcoin if prices continued to decline. Bitcoin has fallen roughly 30% since reaching its all-time high in early October, while Strategy shares have fallen more than 50% over the same period.
The company's mNAV, a key valuation metric that compares enterprise value to Bitcoin stock, was approximately 1.1 on Monday, according to Strategy's website. This figure highlights ongoing investor concerns that the metric could soon turn negative, despite previously commanding a significant premium.