Strategy CEO Phong Le told Bloomberg TV that the company's balance sheet would remain very secure until Bitcoin reaches the $8,000–$10,000 range, framing it as a capital-structure stress threshold tied to debt risk. At Bitcoin's current price of approximately $64,500, that level implies roughly an 85% drawdown. MSTR closed at $97.58 on Tuesday, up roughly 6% on the day. Le described the $8,000–$10,000 level as the point at which Strategy would have to consider some of the risk associated with its debt, stating the company needs to build a capital structure that can withstand bear markets and benefit from bull cycles. Strategy holds over 840,000 Bitcoin as of mid-2026, making it the world's largest corporate Bitcoin holder, and the timing of debt maturities alongside cash reserve buffers determines whether distress selling occurs.
Le discussed an even more extreme tail scenario on Bloomberg TV: Bitcoin would need to go down 90% or for five years sustainably before Strategy might sell Bitcoin to satisfy convertible debt, a scenario he called extremely unlikely. Strategy has consistently positioned any Bitcoin liquidation as a hypothetical tail event, not an operational contingency, and the capital structure is engineered to keep it that way. An 85% drawdown would devastate the asset side of the ledger, but the liability side, specifically the timing of debt maturities and the cash reserve buffer, is what determines whether distress selling actually occurs.
STRC Preferred Stock Falls Below Par, Restricts New Share Issuance
The more immediate pressure point is STRC, Strategy's perpetual preferred stock. Designed to hold a $100 par value and pay a 13% annual yield, STRC lost par in April 2026, then crashed below $75 in late June before partially recovering to around $90. When STRC falls below $100, it restricts Strategy's ability to issue new shares to fund Bitcoin purchases. Le pointed to building USD reserves as a key lever to restore STRC confidence, stating the company has learned over the last couple of months that having liquid access to U.S.-dollar capital is quite important and will continue to build that.
Strategy Raises Cash Reserve to $3 Billion to Cover Dividends and Interest
Strategy raised its cash reserve to approximately $3 billion, up from a prior $1.4 billion target, following a stock sale, which allowed the firm to pause Bitcoin sales between July 6 and July 12. That reserve is sized to cover dividends and interest for roughly 21 months without touching the Bitcoin treasury. The Bitcoin Monetization Program is designed precisely to prevent distress sales from becoming routine.
Strategy Sold 3,588 Bitcoin Below Cost Basis Earlier This Year
Strategy sold 3,588 Bitcoin at roughly $60,000, below its approximately $75,000 average cost basis, to fund preferred dividends earlier this year. Le frames these as operational process tests and tax-loss harvesting rather than distress sales. The framing is plausible given the scale of the reserve now in place, but the fact that Bitcoin was sold below cost is a data point the market has not fully digested.
FAQ
What debt risk threshold did Strategy CEO Phong Le set for Bitcoin?
Phong Le told Bloomberg TV that Strategy's balance sheet would remain very secure until Bitcoin reaches the $8,000–$10,000 range, describing it as the point at which the company would have to consider some of the risk associated with its debt.
Why did Strategy's STRC preferred stock fall below par value?
STRC, designed to hold a $100 par value and pay a 13% annual yield, lost par in April 2026 and crashed below $75 in late June before partially recovering to around $90. When STRC falls below $100, it restricts Strategy's ability to issue new shares to fund Bitcoin purchases.
How much cash reserve does Strategy hold to cover dividends and interest?
Strategy raised its cash reserve to approximately $3 billion, up from a prior $1.4 billion target, following a stock sale. That reserve is sized to cover dividends and interest for roughly 21 months without touching the Bitcoin treasury.
