Strategy's Bitcoin Policy Shift Creates 'Noise' for Crypto, Standard Chartered Says

Uncertainty surrounding a shift in the Bitcoin strategy of major corporate holder Strategy (formerly MicroStrategy) is creating near-term price pressure for the cryptocurrency, according to a note from Standard Chartered. The bank maintains, however, that clearer communication from the company could remove this overhang, reiterating its bullish long-term price target.

Shifting Corporate Strategy

In a note to investors on Friday, Standard Chartered analyst Geoff Kendrick said that Strategy, the largest corporate holder of Bitcoin, "appears to be pivoting from its 'never sell Bitcoin' mantra to a more complex approach." The company holds a significant 843,775 coins, which represents more than 4% of the total 21 million Bitcoin that will ever exist.

The strategic pivot is reportedly driven by a decline in the company's mNAV metric, a measure of its enterprise value divided by its Bitcoin holdings. With this metric falling to a ratio of approximately 1.0, the firm's long-standing model of issuing shares to fund Bitcoin purchases has become less effective, according to the bank's analysis.

A New Role for Bitcoin Holdings

Strategy's new approach involves utilizing its vast Bitcoin reserves as backing for its preferred stock (STRC), which the analyst describes as functioning like a credit product. Kendrick noted that the STRC, which has around $10 billion in notional value outstanding, is "heavily over-collateralised."

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Based on this collateralization, the analyst stated that the preferred stock should trade back to its $100 par value from its current level of around $90.

Market Impact and Outlook

Standard Chartered believes that effective communication from Strategy about its new approach is crucial to reassure markets that a large-scale sell-off of its Bitcoin is unlikely. "If this signalling proves effective, it should remove the need for MSTR to actually sell any BTC," Kendrick wrote.

Consequently, the bank views the recent price weakness in Bitcoin as "mostly noise rather than a signal of BTC's medium-term direction." Standard Chartered reaffirmed its price forecast, maintaining that the market dynamics support its positive outlook.

• Maintained BTC Price Target (End-2026): $100,000
• Strategy's BTC Holdings: 843,775
• STRC Notional Value: Approximately $10 billion