Strategy revamped its Bitcoin valuation metrics, introducing 'net' measures to clarify common shareholder value by excluding debt and preferred stock. Executive chairman Michael Saylor called it a 'new financial language.' MSTR stock is under pressure ahead of Q2 earnings on July 30, even as new metrics show improved parity.
Metaplanet, JPYC, and Progmatare are collaborating on a study to explore Bitcoin-backed digital credit products in Japan. The initiative aims to use BTC as collateral and JPYC for settlement, potentially creating a more efficient and transparent credit market.
Strategy's new financial framework, including a $2.55B reserve and BTC monetization, aims to cover dividend obligations. Meanwhile, Bitcoin dropped below $60,000, with significant transfers to exchanges and ETF outflows, creating separate market pressures.
Strategy introduced a "Digital Credit Capital Framework" allowing it to sell up to $1.25 billion in Bitcoin to fund cash reserves, pay dividends, and repurchase securities. This move aims to strengthen credit quality and manage capital amidst pressure on its preferred stock.
Bitcoin-linked digital-credit products, designed for income, experienced significant volatility and price drops due to leveraged investors facing margin calls. Issuers like Strategy and Strive saw their preferred shares slide, highlighting risks in the nascent market.
Digital credit products from Strive and Strategy experienced their worst day on record Thursday, with prices plummeting below par values. Strive CEO Matt Cole attributed the declines to a 'leverage liquidation event,' not a deterioration of underlying credit quality, while acknowledging investor concerns about dividend payments.
Michael Saylor, executive chairman of Strategy, defended the company's recent Bitcoin sale, stating it's necessary to issue 'digital credit.' He explained that Bitcoin treasury companies must be able to sell holdings to support dividend-paying securities and Bitcoin-backed credit products, calling digital credit a "trillion-dollar opportunity."
