PiCK
Strategy Plans to Expand Bitcoin-Backed Credit Business, With Annual Issuance of Up to $10.8 Billion
Forecast Trend Report by Period
Strategy, the world’s largest corporate holder of Bitcoin, is positioning “Digital Credit” — fundraising backed by Bitcoin — as a new growth engine.
Odaily reported on August 19 that Strategy said in an investor report released that day it held 840,447 Bitcoin as of August 9. That represents about 4% of Bitcoin’s total supply of 21 million coins.
The company plans to expand its credit business using those Bitcoin holdings as collateral. Depending on market conditions, it aims to issue digital credit products equal to 10% to 20% of the value of its Bitcoin holdings. At current prices, that would translate into annual issuance of $5.4 billion to $10.8 billion.
Strategy also plans to use capital-markets instruments such as corporate bonds and preferred stock to increase its Bitcoin holdings over the long term.
The company identified Bitcoin price volatility, tighter funding conditions and a decline in mNAV, the ratio of net asset value to market capitalization, as key risks.
