If You Hold BTC, Watch This Now | Mark Moss

[00:00:00]So they sell their common stock ATM at the market and so they sell MicroStrategy stock. That raises money which allows them to buy more Bitcoin or they could pay the dividends on the prefs. They also can issue more stretch.

[00:00:13]So whenever a stretch goes over $100, they can sell more stretch at the market into the market and they can generate that money as well. And then finally, if they need to, they could dip into their Bitcoin treasury which is over 840,000 Bitcoin. Now, there's also other ways they can get money. So for example, they have credit available to them. We saw them raise billions of dollars at almost 0% interest. So they can go back to the capital markets, they can do private equity raises, they can sell the equity in the market, they can borrow money, they can do capital raises. Uh they can issue more stretch, they can sell the common stock into the market, they can sell the Bitcoin if they need to.

[00:00:49]There's lots of tools they can do before they ever have to tap into the Bitcoin reserve and if they have to, as we saw right here, they have over 32 years backing that.

[00:00:59]>> While investors focused on Strategy's first disclosed Bitcoin sale, a much bigger story was unfolding behind the scenes. The move may have strengthened the company's ability to access capital while keeping its massive Bitcoin position largely untouched. Mark Moss reveals that Strategy's first disclosed Bitcoin sale sparked a sharp market reaction even though the company sold just 32 Bitcoin between May 26th and May 31st at an average price of $77,135 per coin, generating approximately $2.5 million. The announcement triggered concern among investors and contributed to Bitcoin falling below $72,000 as many interpreted the move as a sign of weakening conviction. However, the numbers tell a different story. With 843,706 Bitcoin held as of May 31st, acquired at an average cost of $75,699 per coin, the 32 Bitcoin sold represented only 0.004% of the company's total holdings.

[00:02:05]According to Moss, the transaction was not a bearish signal for Bitcoin, but a strategic financial decision tied to Strategy's broader capital market objectives. The proceeds were used to support distributions on STRC, the company's perpetual preferred stock with an annualized variable dividend of 11.5%.

[00:02:25]He explains that demonstrating Bitcoin's liquidity can help satisfy credit market requirements and strengthen access to future financing opportunities. Rather than indicating a shift away from Bitcoin, the sale highlighted how a large corporate holder can leverage its digital asset treasury while maintaining long-term exposure. Moss argues that Strategy remains focused on Bitcoin and is positioning itself to tap into the $350 trillion fixed income market, creating additional pathways to attract capital without materially reducing its Bitcoin reserves. Share your thoughts in the comments, and don't forget to like, share, and subscribe for more Bitcoin and crypto market insights.

[00:03:06]>> Strategy did halt new Bitcoin purchases.

[00:03:10]All right, so they've been buying Bitcoin regularly, and they decided to halt Bitcoin purchases temporarily for one break, and then what they did, which seems to have disrupted the entire market, was they did their first Bitcoin sale that we've seen. 32 Bitcoin sold. Now, let's put this into perspective what happened and why. First of all, they sold 32 Bitcoin out of about 840,000 Bitcoin. They're buying thousands of Bitcoin at a time, and they sold 32. 32 is a drop in the bucket. 32 is inconsequential.

[00:03:42]But why did the market freak out over it number one, and two, why did they even sell 32 if it's so inconsequential?

[00:03:47]Couple reasons why. They are not playing a Bitcoin game necessarily, they're playing a financial market, it's a traditional financial market game.

[00:03:54]They're playing a stock and equity game.

[00:03:56]And in that world, selling credit instruments, they need credit ratings.

[00:04:01]And per the credit rating funds, some of them don't treat Bitcoin as actual capital. So, they don't believe that even though they have 50, 60 billion dollars in Bitcoin assets, that they could actually use those assets to pay the debt if they needed. So, so strategy wanted to prove it. They said, "Okay, we'll prove it. We'll sell 32 32 Bitcoin.

[00:04:20]You can see how liquid it is, how easy to sell the money sell it for money, and pay the dividend." And they did. Again, it was a token. It was a drop in the bucket. It was just proof, and what it did is it satisfied the rating agencies, which allows them to move to the next level in the credit game. But, the market said, "Wait a minute. You said Michael Saylor said he's never never going to sell Bitcoin."

[00:04:39]Michael Saylor corrected that. He said, "I said for you to never sell your Bitcoin." He said, "I have never sold my Bitcoin." Strategy, on the other hand, did sell some Bitcoin. So, he did He was He clarified that. He said, "He, I, you and I, we should not sell our Bitcoin.

[00:04:54]The company is playing a different game.

[00:04:56]In order to appease the regulators, they did that." So, 32 Bitcoin, but that also pushed the price down. They halted They halted Bitcoin buys, pushed the price down. Then they sold Bitcoin, again, 32 billion, pushed the price down. And then, um then they're changing the dividend payment, but this is a good thing. We're going to talk about this more in a minute. They've been paying monthly, and now they want to pay semi-monthly, which means instead of paying once a month, they want to pay twice a month. Which is great. Most people are getting used to paid getting paid every 2 weeks. Okay, so we looked at it coming off of par, off of the 100. We looked at about how far they've dropped and how long that's lasted. We looked at the fundamentals, and of course, we realized that part of the bigger fundamental is that the underlying asset, the digital credit, Bitcoin, is also down about 50%. But, the other thing we want to keep in mind is compared to what? How does 8% drawdowns compare compared to what?

[00:05:47]Well, the fixed income market is the largest market in the world. 350 trillion dollars of fixed income. It's three times larger than the next biggest market, right? Than the equity market.

[00:05:59]And so, some people just need income.

[00:06:01]Not everybody can buy Bitcoin and wait for 5 years. Some people need income right now. I'm retired. I need to pay my bills, pay my medical expenses, whatever it is. We need income. It's the largest market in the world.

[00:06:11]So, where do people typically invest to get income? Well, sometimes they maybe dividend paying stocks. Obviously, it could be real estate. But, most of it is in the bond, money market, institutional grade credit funds, things like that.

[00:06:24]>> The biggest threat to Bitcoin right now may not be the price drop itself, but growing doubts about the funding model behind its largest corporate holder.

[00:06:33]Mark Moss reveals that growing fears around Strategy's funding model have become a major factor behind recent crypto market weakness. Bitcoin dropped about 3.3% to roughly $62,229, approaching the key $60,000 level as investors reacted to concerns over higher interest rates and pressure on Strategy's capital structure. Additional uncertainty emerged after STRC, the preferred stock used to help finance Bitcoin acquisitions, traded below its $100 par value since mid-May, raising questions about the company's ability to continue expanding its Bitcoin position at the same pace. Despite the negative sentiment, Moss argues that the market may be overlooking the company's financial flexibility. Strategy recently stated that its Bitcoin treasury provides approximately 32 years of dividend coverage, offering a substantial cushion against future obligations. Even with annual dividend commitments estimated at around $1.7 billion, the company still has several funding options available before needing to rely heavily on its Bitcoin reserves.

[00:07:42]According to Moss, Strategy maintains cash reserves that have ranged between roughly $1 billion and $2.5 billion, while also retaining access to equity issuance, additional STRC offerings, private capital, borrowing opportunities, and traditional credit markets. Although Bitcoin, Ether, and Solana have faced pressure during this risk-off environment, Moss views the current period as a significant test of Strategy's Bitcoin- backed financial model rather than evidence of structural failure. Let's get back to the video.

[00:08:15]>> Now, this uh this went out on uh X today on Twitter from Strategy itself, and they said right here, "We have 32 years of dividend coverage through their Bitcoin reserve." So, 30 years. So, a lot of people wonder like, "Can they keep making the payments? What happens if they don't have any more income? What happens if the credit markets drop?" All these things. Well, they say right here, "We have 32 years." They have $55 billion of reserves, and they owe $1.7 billion per year. Now, that's if they wanted to tap into their Bitcoin, but they have lots of other things they can do before they have to get into their Bitcoin. I'm going to cover that in a minute.

[00:08:52]But, so those are the two things that we want to be watching here. Now, here's a couple ways that we can think about how they can handle those payments. So, first of all, they have this dividend obligation. As I said, it's about 1.7 per year they have to pay out for money that they received. So, a couple ways they can do this. So, number one, they have a cash reserve. Right now, they had it up to about 2 and 1/2 billion. I think it's down to about a billion or so right now, but they have this cash reserve. It kind of goes up and down, and they keep that on hand to pay this out.

[00:09:20]So, they have about a year's uh reserves on hand. Then, they have equity issuance. So, they sell their common stock ATM at the market, and so they sell MicroStrategy stock. That raises money, which allows them to buy more Bitcoin, or they could pay the dividends on the prefs. They also can issue more stretch. So, whenever stretch goes over $100, they can sell more stretch at the market into the market, and they can generate that money as well. And then finally, if they need to, they could dip into their Bitcoin treasury, which is over 840,000 Bitcoin. Now, there's also other ways they can get money. So, for example, they have credit available to them. We saw them raise billions of dollars at almost 0% interest. So, they can go back to the capital markets, they can do private equity raises, they can sell debt equity in the market, they can borrow money, they can do capital raises.

[00:10:08]Uh they can issue more stretch, they can sell the common stock into the market, they can sell the Bitcoin if they need to. There's lots of tools they can do before they ever have to tap into the Bitcoin reserve. And if they have to, as we saw right here, they have over 32 years backing that. So, the chance of this blowing up is extremely low. Now, this is bigger than the ticker, okay?

[00:10:30]This is not just about a stock. And as I said, this is one of the biggest opportunities Maybe opportunities is the wrong word, but maybe this is one of the biggest fundamental shifts of the entire global monetary system that we've ever seen or will ever see in our lifetime anyway.

[00:10:42]It's not just a stock.

[00:10:44]It's an entire new financial system.

[00:10:46]It's digital capital, and now there's a digital credit built on top of the digital capital. What do I mean by that? So, right now we've seen digital credit grow from zero to $13 billion in less than less than a year. It's about 11 months. 11 months. And this is really the category's first punch. What do I mean? The first punch in the face.

[00:11:07]Mike Tyson said, "Everybody has a plan until they get punched in the face." And so, this is sort of the first real stress test. We're getting punched in the face. Bitcoin has drawn down 50%.

[00:11:18]Lots of fud in the marketplace about MicroStrategy. They sold some Bitcoin, they paused their Bitcoin buys, and we're seeing the first punch, and we're seeing it sort of hold up about the same way it's been holding up this whole time. The most important takeaway is that a sale of 32 Bitcoin triggered outsized market fear despite representing just 0.004% of holdings exceeding 840,000 Bitcoin.

[00:11:42]While Bitcoin has faced a 50% drawdown and concerns have emerged around funding costs, dividend obligations, and capital market conditions, the underlying structure remains supported by multiple liquidity sources, significant cash reserves, and approximately 32 years of dividend The rapid growth of Bitcoin-backed digital credit to roughly $13 billion in less than 11 months highlights increasing institutional adoption beyond simple asset accumulation. For investors, the key question is no longer whether Bitcoin can attract capital, but whether Bitcoin-based financial products can continue expanding through periods of volatility. Current conditions are testing that model, and so far the framework appears to be holding under pressure. Do you believe strategies Bitcoin-backed financial model will emerge stronger from this market stress test, or could funding pressures create bigger risks for Bitcoin investors ahead? Share your thoughts in the comments, and don't forget to like, share, and subscribe for more Bitcoin and crypto market analysis.