Bitcoin treasury Strategy has established a new cash reserve that it will use to buy Bitcoin, according to a Monday filing.
The Nasdaq-listed company said it not only had increased its typical cash buffer to $5.1 billion but also created another pot of $1.59 billion which it may use to buy bitcoin and stock.
Strategy has not bought bitcoin since June, instead focusing on stock buy-backs and creating a cushion — as well as occasionally selling bitcoin.
“USD Cash is a separately designated pool of U.S. dollar liquidity that the Company may retain for future deployment for general Bitcoin Treasury Company purposes, which may include acquiring bitcoin, paying declared cash dividends on Strategy’s preferred stock and interest on its outstanding indebtedness, repurchasing Strategy’s MSTR Stock or preferred stock, repaying, repurchasing or redeeming Strategy’s outstanding convertible notes, increasing the USD Reserve, and other similar Bitcoin Treasury Company purposes,” the filing stated.
Strategy has said that its buyback plan — approved in July — is about balance-sheet strength rather than retreat. President and CEO Phong Le has said that Strategy intends to remain a long-term bitcoin buyer.
Shares of Strategy (Nasdaq: MSTR) were trading higher Monday morning in New York. The company’s stock rallied last week as the price of bitcoin rose.
Strategy said in the filing that it sold about $2 billion in common shares last week, and also repurchased $136.4 million of its Stretch preferred shares.
Corporate software company Strategy — formerly MicroStrategy — started buying bitcoin in 2020 as a way to protect shareholder returns.
It has since spent nearly $64 billion on the cryptocurrency largely using leverage and now holds 840,447 BTC worth $66.4 billion at today’s prices, making it the largest corporate holder of the digital coin.
Investors can get exposure to Bitcoin via stock and dividend-paying instruments that Strategy has issued.
Bitcoin’s price recently stood at $79,031, up 25% over a seven-day period.