On Tuesday, Bitcoin-linked equities experienced a notable uptick as the broader cryptocurrency market underwent a sharp recovery, with Bitcoin successfully reclaiming the $91,000 mark.

Notably, Strategy emerged as the primary driver of this movement, outpacing both Bitcoin’s own gains and the performance of several major technology stocks. MSTR shares rose by 8.66%, reaching $186.26, supported by a substantial trading volume exceeding 4.4 million shares.

As of the latest trading session, MSTR shares are currently valued at $182.74.

This increase modestly surpassed Bitcoin’s rebound, indicating a renewed demand for high-beta exposure to the digital asset through equity markets.

Other cryptocurrency-related stocks also noted advancements, including the iShares Bitcoin Trust ETF, which experienced a gain exceeding 7%. Smaller entities, such as Smarter Web Company and Metaplanet Inc., reported mid-single-digit increases in stock value.

Capital B registered the most significant percentage increase within this group, trading over 10% higher at various points throughout the day.

The surge in Bitcoin equities coincided with a marked increase in institutional demand across the market. Trading desks have reported robust inflows into Bitcoin ETFs, a trend that has gained momentum as major Wall Street firms begin to adopt regulated cryptocurrency products.

Strategy’s Commitment to Bitcoin

The rise in Strategy’s stock was further bolstered by recent remarks from CEO Phong Le, who addressed the company’s balance sheet strategy and long-term commitment to holding Bitcoin during an interview with Bloomberg.

Le affirmed that Strategy has no intentions of liquidating its Bitcoin holdings except as a last resort, emphasizing the company’s steadfast commitment to paying dividends on its preferred shares.

He articulated that sustaining the dividend is crucial for preventing uncertainty from permeating the company’s capital structure, aiming to uphold it “in perpetuity,” despite the board’s capacity to suspend payments if necessary.

In response to concerns about leverage, Le refuted the notion that the company is excessively leveraged, indicating that Strategy’s leverage ratio is approximately 12%, or 27% when preferred shares are factored in—significantly lower than the levels typically observed in U.S. corporations.

Recently, the company successfully raised $1.44 billion in equity in slightly over a week, an amount sufficient to cover nearly two years of dividend obligations.

Le also noted that Strategy’s Bitcoin reserves now provide multiple years of dividend capacity, mitigating the risk of having to liquidate holdings during periods of market stress.

The organization is in the process of building a cash reserve aimed at covering two to three years of dividend payments, a buffer that Le anticipates maintaining for at least the next five to ten years.

He reiterated that Strategy should not be viewed as a closed-end fund or ETF, asserting that the firm operates as a fully functional Bitcoin-focused company with employees, products, and revenue, rather than a mere passive investment vehicle.

Le mentioned that the firm has begun educating MSCI and other index providers on this distinction as they reevaluate whether digital asset treasury companies should remain part of major indices.

Exploration of Bitcoin Lending Opportunities

Le indicated that MicroStrategy is also considering opportunities within the Bitcoin lending space, contingent upon the full participation of large U.S. banks.

Conversations are underway with institutions that are preparing to offer custody and lending services. He emphasized that traditional banks possess the scale and balance-sheet strength that MicroStrategy seeks in potential partnerships.

In a decisive rebound, Bitcoin traded near $91,100 late Tuesday, marking an 8% increase within a 24-hour period, with volume approaching $78 billion—one of the strongest trading sessions observed in recent weeks.

This movement has raised Bitcoin above its seven-day high, securely maintaining its position above last week’s low near $84,000.

This uptick coincided with several major financial institutions making their most aggressive advances into Bitcoin investment products.

Bank of America announced that its 15,000 wealth advisers will be authorized to recommend crypto exposure for the first time, starting January 5. The bank will allow allocations of 1% to 4% via a select group of Bitcoin ETFs, marking an end to years of internal restrictions.

In another significant shift, Vanguard has allowed access to Bitcoin ETFs and crypto-linked mutual funds for the first time, granting more than 50 million brokerage clients regulated Bitcoin exposure—a dramatic change for a firm that previously characterized Bitcoin as too speculative for long-term investment.

Source link