Morning Minute: Saylor's Strategy Hoards Cash, Doesn't Buy BTC

The raise added roughly 18% to Strategy’s cash reserves in one move, giving the company more than 20 months of coverage on its $1.76B in annual dividend and interest obligations. So the entirety of the week’s capital markets activity went toward fortifying the balance sheet’s cash cushion. Since its last Bitcoin purchase on June 22, Strategy has generated about $215M from selling Bitcoin, less than half of what this single stock issuance brought in. So the stock sales are now doing more work than the Bitcoin sales.

Once again, Saylor is issuing common shares to fund dividend payments on his preferred stock. MSTR holders are being diluted to pay STRC holders. MSTR fell 4% Monday to around $90.80, down 18% on the month, though it has steadied since hitting a 28-month low of $81.81 in late June. STRC sits at $87.04, still below its $100 par value where it has lingered since mid-May while paying a 12% dividend. And with Bitcoin at $62,600 against an average cost of $75,476, the 843,775-coin stack is roughly $11B underwater.

The biggest open question right now is—why isn’t he buying Bitcoin at these prices? Raising cash to alleviate market concerns and to fund future debt payments made sense when he was mostly depleted, but now Saylor is flush. He’s got 20 months' runway, and more importantly, he’s proven he can just dump MSTR shares whenever to raise cash. So why not buy BTC here 50% off ATH? Certainly any BTC buy in the low 60s makes more sense than buys in the 80s, 90s, or over 100k. So why aren’t they coming? And when will the next buys hit the tape? Hopefully we find out soon. Or Saylor will have some explaining to do…

Senate Democrats are hardening against the CLARITY Act, and Trump’s $1.2 billion crypto fortune is (unsurprisingly) the wedge.

The vote math is the tricky part here. CLARITY needs 60 votes, which means at least seven Democrats have to cross over, and possibly more given the Republican bench is thinner than expected (Mitch McConnell remains hospitalized, and Lindsey Graham died suddenly over the weekend). Trump argued Monday that the Senate should pass CLARITY in Graham’s honor, calling him a big supporter of crypto legislation. Graham was never involved in the negotiations, rarely spoke on the topic, and was the only Senate Republican to co-sponsor a 2023 anti-money-laundering bill that crypto groups called deeply hostile to the industry.

So where does this leave us? Less than four weeks remain before the August recess, and everyone involved agrees that missing it means the bill dies in the noise of the November midterms. The industry’s own forecasters have already marked it down, with Galaxy cutting its odds to 50% and prediction markets pricing it in the low 40s. The core problem is that the harder Democrats push for ethics language, the more they force Republicans to choose between passing the bill and protecting the president’s business interests. That’s a bad trade to have to make with a hard deadline bearing down.