Grayscale Says Strategy Would Better Restore Confidence by Selling More Than $3 Billion of Bitcoin

Grayscale said Strategy may do more to restore market confidence by selling more than $3 billion of Bitcoin to raise cash than by increasing dividend payouts.

Wu Blockchain reported on June 28 that Zach Pandl, Grayscale's head of research, said a 50-basis-point increase next week in the dividend rate on Strategy's STRC preferred stock would add only about $100 million in dividend costs over the next two years. That would be insufficient to restore market confidence, he said.

Selling more than $3 billion of Bitcoin instead could cover most of the company's cash obligations over the next two years and more effectively rebuild investor confidence, Pandl added.

The market had already grown concerned about Strategy's shrinking cash holdings and rising dividend burden, sending the price of its STRC preferred stock sharply lower. The decline has also fueled investor concerns about the sustainability of the company's dividend and its financial health.