Strategy Revamps Bitcoin Metrics Amid Ongoing Bear Market

New Framework Introduced

Strategy has implemented a new framework to better showcase its bitcoin metrics amid a persistent bear market. The updated approach provides a clearer understanding of the company’s net bitcoin exposure by factoring in obligations related to preferred stock and convertible debt.

Details on Net Reserve

The firm, known for being the largest corporate holder of bitcoin, reported a net reserve of $36.6 billion. This figure is calculated from a total bitcoin reserve of $55.6 billion (made up of 843,775 BTC) and an additional $3.2 billion in USD reserves, after deducting $6.8 billion for out-of-the-money convertible debt and $15.5 billion in preferred stock. The amounts deducted represent senior claims in any potential liquidation situation.

Ongoing Adjustments

This adjustment in metrics reflects a broader trend as Strategy continuously refines its financial guidance while navigating the downtrend that began last October. The company’s preferred stock, trading as STRC, has not reached its intended par value of $100 since mid-May, currently sitting close to $85.

Updated Accounting Metrics

One significant change is the company’s new multiple to net asset value (mNAV) formula. Previously, the mNAV threshold was often above 1.0x, complicating the assessment of how new share issuance affected shareholders. Under the new formula, the threshold is set permanently at 1.0x. If MSTR trades over this benchmark, issuing new shares increases the bitcoin amount per share for all investors.

Growth Rates and New Metrics

Strategy also introduced a BTC Breakeven Annualized Rate (ARR) of 3.22%, indicating that bitcoin must appreciate faster than this rate annually for the company to cover its interest and dividend obligations solely through bitcoin gains. The update further includes new market metrics, providing insight into bitcoin’s performance relative to the 200-week moving average and its position on the Fear and Greed Index.