Morning Minute: Strategy Turns Net Seller

GM!

Today’s top news:

Michael Saylor framed the sales as routine treasury management, saying they covered dividend obligations on the company’s Digital Credit securities (STRF, STRC, STRK and STRD) and refilled its fiat reserves (now over $2.5B). Holdings now sit near 843,775 BTC, down from a June 22 peak of 847,363.

Those are the objective details. Now let’s dig into what has actually happened here. Strategy spent June buying the dip and July selling it right back. Do the math on the round trip: it bought roughly 3,657 BTC in June at an average near $64,600, then sold about 3,620 BTC over the following two weeks at an average near $60,400. In kindergarten terms, Saylor bought ten glasses of lemonade for a dollar each, then sold ten glasses back at 93 cents to pay his bills. Is that a good strategy?

Some will say his hand was forced. Others think that he’s doing this to appease creditor concerns and to help get MSTR into indexes. But it’s tough to look at a month of buying at a higher price than the sales came through at the end of the month as any kind of grand plan.

With that said, the market seems to have liked the news at least near term. BTC immediately sold off on the headline to $61,800 then rebounded to $64,200 overnight. It does feel like a Band-Aid has been ripped off with the sale, and any concerns of Saylor blowing up are very gone now that he’s proven he’ll sell.

Long term, Saylor selling seems bullish. Near term, there are still questions of how much more he’ll sell and at what price the market will let him get those sales off. If he shows net buys for the next few weeks, perhaps the bottom is behind us. If he shows a propensity to keep selling, harder to project a major run-up in price.

We will find out soon enough…