Strategy remains under pressure as Bitcoin hovers near $60,000, but recent capital moves have bought the company time, according to Jim Ferraioli, director of crypto research and strategy at the Schwab Center for Financial Research.
Speaking on Morning Trade Live at the New York Stock Exchange, Ferraioli said the firm led by Michael Saylor faces scrutiny while the price of Bitcoin sits 50% below its peak. Strategy, the largest corporate holder of Bitcoin, has funded much of its buying through preferred equity, including its variable-rate Stretch preferred stock, known as STRC.
That product fell near $70 from its $100 par value before a rebound. To defend the peg, Strategy raised the STRC dividend to 12% and authorized $2 billion in buybacks while unlocking further Bitcoin sales. The stock has since started climbing back toward par.
“The market is supportive of these actions,” Ferraioli said, describing the response as a check on fears of cascading liquidations.
The shift marks a change in tone for a company known for a “never sell” stance.
“We went from never sell Bitcoin to strategically sell Bitcoin,” Ferraioli said, acknowledging fair criticism. He cautioned that a lower multiple could limit Strategy’s capacity to issue shares and buy more Bitcoin in the second half of the year.
Schwab’s perspective on Bitcoin’s slump
Ferraioli weighed in on a market bump that followed comments from President Trump, who signaled openness to holding Bitcoin in the new Trump Accounts savings program.
Ferraioli read the move as a sign of one more potential class of buyer, alongside mainstream investors who entered through spot ETFs.
“The crypto market loves narratives,” he said, calling the asset momentum-driven.
On correlations, Ferraioli described Bitcoin as a low-correlation asset, a trait he traced to the four-year halving that cuts new supply. Past ties to tech stocks have broken down, and a historic inverse relationship with the dollar has wavered; Bitcoin has rallied during periods of dollar strength this year.
“Starting points matter,” he said, noting that Bitcoin rose during the Iran conflict as the dollar gained.
He addressed the dollar-yen rate, which trades near 40-year lows. A stronger yen could unwind the carry trade, in which investors sell the yen to buy growth assets. Ferraioli framed a yen rebound as a possible headwind for risk assets, though not a primary near-term risk for Bitcoin.
On the debasement trade, Ferraioli pushed back on the idea that last year’s gold rally, set against a halving of Bitcoin’s market cap, disproved the store-of-value case.
He attributed the gold move to supply constraints and momentum rather than fiscal fear. The federal budget deficit has narrowed from 8-9% of GDP to 5%, near the median across Bitcoin’s life.
“It’s not an endorsement of the fiscal health,” he said, “but it helps put that narrative in check.”
#Schwab #Strategist #Backs #Strategys #STRC #Playbook #Bitcoin #Weakness