Bitcoin News Today: Strategy Boosts Cash to $2.19B as Bitcoin Rises Past $90K

Saylor's Strategy Inc. sold 4.5 million shares of Class A common stock, raising $748 million in net proceeds to bolster its cash reserves to $2.19 billion according to reports. Despite the stock market activity, the company did not make any new Bitcoin purchases last week according to Seeking Alpha. This pause in Bitcoin buying comes as the company builds up its cash reserves to support dividend and interest payments, amid ongoing concerns about the crypto asset's volatility according to Bloomberg.

Bitcoin, the largest cryptocurrency by market capitalization, rose to $90,000, reversing a week of declines. The price action has provided some relief for investors who have seen Strategy's stock fall over 40% year to date according to Coindesk. Strategy's Bitcoin holdings remain unchanged at 671,268 BTC, with an average cost basis of $74,972 per coin, and a current market value of approximately $60 billion.

The company's move to strengthen its liquidity position has been met with mixed reactions from market participants. Critics argue that the issuance of common and preferred shares dilutes existing shareholders and pressures equity valuation metrics according to CoinPaper. Meanwhile, supporters view the cash reserves as a strategic move to insulate the company from short-term volatility in the crypto markets according to Seeking Alpha.

Why the Standoff Happened

Strategy has historically funded its Bitcoin accumulation through equity and debt financing, and this week's capital raise is part of an ongoing strategy to secure liquidity amid a volatile crypto market. The company's cash reserves are now over $2.2 billion, up from $1.44 billion a week prior, according to reports. This increase is intended to ensure the firm can meet its obligations, including preferred stock dividends and interest on its debt according to Bloomberg.

The company's decision to pause Bitcoin purchases may signal a tactical shift rather than a strategic reversal according to CoinPaper. After acquiring $1.9 billion in Bitcoin over the first half of December, the company is now prioritizing cash flow stability. Analysts suggest that the move reflects a broader concern about the risks of overexposure to a crypto asset that has fallen over 30% since its October high according to Bitcoin Magazine.

How Markets Reacted

Strategy's stock closed at $167.35 on Monday, according to Barrons, up 1.5% alongside a modest rise in Bitcoin. The company's market-to-nav (mNAV) ratio stood at 1.1, indicating a narrowing gap between the firm's market value and its Bitcoin holdings. Investors remain cautious, with some warning that the mNAV could turn negative if the stock continues to decline relative to Bitcoin's value.

The market's reaction to Strategy's capital raise was also influenced by broader macroeconomic developments. The U.S. inflation report, which came in below expectations, fueled speculation that the Federal Reserve may cut interest rates sooner than previously expected. This shift in monetary policy could support a broader risk-on sentiment, benefiting assets like Bitcoin.

Risks to the Outlook

Despite the recent uptick in Bitcoin, market participants are wary of a prolonged crypto winter. Strategy's stock has already fallen over 50% from its high in early 2025, and analysts remain divided on its long-term prospects. The company's aggressive use of capital markets to fund Bitcoin purchases has raised concerns about dilution and financial sustainability according to CoinPaper.

The debate over Strategy's inclusion in major financial indexes has also intensified. MSCI is considering a rule change that would exclude companies with more than 50% of their assets in digital assets. If implemented, the rule could force index funds to sell billions in shares, further pressuring Strategy's stock and Bitcoin's price according to Bitcoin Magazine.

Meanwhile, the company faces ongoing challenges in its software business, which does not generate sufficient cash flow to cover dividends and interest payments. This reliance on capital raising has left Strategy vulnerable to shifts in market sentiment and regulatory changes according to Investing.com.

What This Means for Investors

Investors are closely watching how Strategy navigates the next phase of the crypto market cycle. The company's pause in Bitcoin buying and focus on liquidity may provide short-term stability, but long-term success will depend on the broader performance of digital assets and the company's ability to maintain financial flexibility according to Coindesk.

Analysts are also monitoring key price levels for Strategy's stock. Traders on X have highlighted the $231 level as a potential breakout point, with a longer-term target of $340. Meanwhile, Bitcoin's ability to hold above $87,000 remains critical for both the crypto and equity markets.

For now, Strategy's actions suggest it is preparing for a period of uncertainty. Whether the company's strategy pays off will depend on how well it can balance its Bitcoin exposure with the realities of capital markets and investor sentiment according to Seeking Alpha.