Strategy's Bitcoin Policy Shift Creates Market Uncertainty, Standard Chartered Says

Uncertainty surrounding the evolving Bitcoin strategy of its largest corporate holder, Strategy (formerly MicroStrategy), is creating near-term price pressure for the cryptocurrency, according to a note from Standard Chartered. The bank maintained its bullish long-term forecast, arguing the current price weakness is "mostly noise."

A Strategic Pivot

In a note to investors on Friday, Standard Chartered analyst Geoff Kendrick said Strategy appears to be moving away from its long-held "never sell Bitcoin" mantra toward a more complex approach. The pivot is reportedly driven by a decline in the company's mNAV metric—which divides its enterprise value by its Bitcoin holdings—to a ratio of approximately 1.0.

At this level, the company's previous model of issuing stock to fund Bitcoin purchases has become less effective, the bank explained. Strategy is now "pivoting towards holding Bitcoin as backing for its preferred stock," STRC, which functions as a credit product, according to the note. Standard Chartered added that STRC, with around $10 billion in notional value outstanding, is "heavily over-collateralised" and should trade closer to $100 from its current price of around $90.

Market Impact and Outlook

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The lack of clarity around this new strategy is a key reason for recent volatility in the Bitcoin market, Kendrick stated. He emphasized that "effective communication" from Strategy is crucial to reassure investors that "wholesale selling is unlikely."

If the company's messaging is successful, it "should remove the need for MSTR to actually sell any BTC," the note added. Despite the short-term uncertainty, Standard Chartered reiterated its key forecasts and observations:

• Corporate Holdings: Strategy holds 843,775 BTC, representing over 4% of the total 21 million coins that will ever exist.
• Price Forecast: The bank maintains its Bitcoin price forecast of $100,000 by the end of 2026.