Capital costs, not price, drive Strategy's Bitcoin buys, says CEO

Strategy has resumed purchasing Bitcoin (BTC), but President and CEO Phong Le stated that the move is not primarily tied to the cryptocurrency's market price.

According to Le, the calculation for the company's return to buying Bitcoin revolves around capital costs rather than timing the market.

Why Capital Costs, Not Bitcoin Price, Determine Strategy's Buying

Strategy's renewed Bitcoin acquisitions came after a 10-week pause during which the company strengthened its balance sheet. Le likened the financial logic to funding a data center construction.

Le noted that land and energy expenses have risen, while the expense of obtaining capital has remained low.

“We don’t really make decisions on Bitcoin specific to Bitcoin price.”

Phong Le, President and CEO, Strategy

Le stated that the strategy is effective only when the cost of selling shares or debt is below Bitcoin's anticipated return. He noted that Strategy ranked fourth among public companies in equity capital raised this year, trailing only SpaceX, Google, and Intel.

Why Strategy Sometimes Sells Bitcoin

Le dismissed the notion that Strategy solely buys Bitcoin, describing it as a 'two way strategy.' Earlier this year, the firm sold roughly 7,000 BTC, less than 1% of its holdings, to support dividends and share repurchases.

Le said that creditors and rating firms anticipate a company that can offload assets when necessary. A company that never divests, he contended, is not a 'fully operating' entity.

CEO Bets on Prolonged Bitcoin Bull Market

Le's remarks indicate he anticipates Bitcoin's upward trend to extend far beyond present prices. He stated that Strategy would continue to purchase at $80,000, $90,000, or $100,000, and even at a $130,000 record, arguing that current buys would appear sound if Bitcoin eventually reaches $260,000.

“I don’t foresee us holding Bitcoin as we enter into what I consider a heavy bull market.”

Phong Le, President and CEO, Strategy

That same belief underpins Strategy's opposition to an MSCI index removal proposal. MSCI is an index provider whose benchmarks drive passive investment flows.

The proposal would remove firms that hold substantial Bitcoin reserves, and Le has labeled it discriminatory.

Le contends that Bitcoin serves as an operating asset on Strategy's balance sheet, rather than a passive investment. That difference may determine whether Strategy remains in MSCI's indexes when a decision is made on October 16.