Strategy's Bitcoin Policy Shift Creates 'Near-Term Noise,' Standard Chartered Says

A shift in the Bitcoin accumulation strategy by its largest corporate holder, Strategy (formerly MicroStrategy), is creating near-term uncertainty for the cryptocurrency's price, according to a research note from Standard Chartered. The bank's analyst, Geoff Kendrick, stated that while the situation is creating market "noise," clearer communication from the company could remove the overhang, leading the bank to maintain its end-2026 Bitcoin price forecast of $100,000.

A Shift in Strategy

Strategy, which holds 843,775 coins, representing over 4% of the total 21 million Bitcoin that will ever be mined, appears to be pivoting from its long-held "never sell Bitcoin" mantra, Kendrick wrote. This change has introduced questions for investors about the future of the company's massive holdings.

The pivot is reportedly driven by a decline in the company's mNAV metric, which measures its enterprise value divided by its Bitcoin holdings. According to Standard Chartered, this ratio has fallen to approximately 1.0, making its previous model of issuing shares to acquire more Bitcoin less effective.

New Focus on Preferred Stock

In response to the changing valuation dynamics, Strategy is now shifting toward using its Bitcoin reserves as backing for its preferred stock, ticker STRC. Standard Chartered described this as a credit product, noting that STRC, with around $10 billion in notional value outstanding, is "heavily over-collateralised."

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Kendrick suggested that due to this strong backing, STRC shares should trade back to their $100 par value from their current level of around $90. The analyst emphasized that effective communication about this new approach is critical to reassuring markets that "wholesale selling is unlikely."

Market Outlook

Standard Chartered believes that if Strategy can successfully signal its intentions and reassure investors, it may remove the need for the company to sell any of its Bitcoin holdings. The bank views the recent price weakness in Bitcoin as temporary noise rather than a fundamental shift in its medium-term trajectory.

Key takeaways from the analyst note include:

• Uncertainty Overhang: Strategy's evolving policy is a key source of near-term market concern.
• Communication is Key: Clear messaging from the company could alleviate fears of a large-scale sell-off.
• Price Target Unchanged: Standard Chartered reiterated its bullish forecast for Bitcoin to reach $100,000 by the end of 2026.