Michael Siler said: Bitcoin\'s annual growth rate of 3.3% can maintain Strategy\'s STRC dividend

Strategy Executive Chairman Michael Siler defended the company\'s capital management strategy, saying that Bitcoin\'s annual increase only needs to exceed 3.3% to support the STRC preferred stock dividend indefinitely.

Strategy Executive Chairman Michael Siler recently defended the company\'s evolving capital management strategy. He said that Bitcoin only needs to rise by more than 3.3% per year for Strategy to be able to continuously pay dividends on STRC preferred stock indefinitely based on the capital gains generated by its Bitcoin holdings.

The background of Thaler\'s remarks was that Strategy recently sold some of its Bitcoin positions to fulfill its dividend obligations, marking a significant shift in the company\'s long-standing philosophy of \"never selling Bitcoin\". Thaler describes this indicator as the company\'s \"bitcoin break-even annualized rate of return\" and believes investors are widely misunderstood about this indicator.

Seler explains in detail the Bitcoin growth threshold that supports STRC\'s dividend strategy.

According to Seler, if Bitcoin\'s long-term annualized increase exceeds the 3.3% threshold, the capital gains generated by the strategic company\'s Bitcoin positions will be sufficient to cover dividend expenditures without consuming the company\'s overall Bitcoin position. He emphasized that despite occasional sales for capital management, the company expects to remain a net buyer of Bitcoin in the long term.

Strategies \'own charts visually demonstrate the importance of this breakeven threshold. With Bitcoin\'s annual growth rate of zero, the company\'s existing reserves are expected to cover approximately 31 years of STRC dividends. Thaler believes that even if Bitcoin\'s long-term increase is only moderate to more than 3.3%, it can significantly extend the sustainability of this dividend model.

Key data:

3.3%-Bitcoin break-even annualized rate of return.
31 years-the dividend coverage period when Bitcoin\'s annual increase is zero.
3,588 coins-the number of bitcoins sold in early July.
US$216 million-The estimated value of the sale.
843,775 coins-the total amount of bitcoins currently held by Strategy.

The digital credit capital framework is both supported and criticized

Thaler\'s statement coincides with Strategy\'s launch of a broader \"digital credit capital framework.\" The framework aims to enhance liquidity while maintaining Bitcoin\'s status as the company\'s main treasury reserve asset. The framework includes a revised STRC dividend policy, a Bitcoin monetization plan, a share repurchase authorization, and expanded cash reserves to support preferred securities during periods of market volatility.

Although the recent Bitcoin sale has sparked controversy among investors, Selle emphasized that the move is an aggressive capital management rather than a deviation from the company\'s long-term Bitcoin strategy. He believes that if sporadic asset sales can increase shareholder value and strengthen the company\'s financial strength, then they can go hand in hand with continued Bitcoin holdings.

However, not everyone agrees with this approach. Critics, including economist Peter Schiff, question whether the increasing dividend obligation will eventually force companies to make larger bitcoin sales if market gains slow. Some analysts also pointed out that strategic companies \'preferred stock financing model relies heavily on Bitcoin\'s long-term performance and capital market access.

Despite criticism, Selle remains confident in Bitcoin\'s historical performance and believes that it can support the long-term prospects of strategic companies. He reiterated that the company\'s core goal remains to maximize shareholder value while maintaining sufficient exposure to the world\'s largest cryptocurrency through strict treasury management.

Strategy shares were under pressure during Tuesday\'s trading session, closing at $97.36, down 3.38%(down $3.41) from the previous day\'s close of $100.77. Weaknesses continued in pre-market trading, with the stock falling another 3.96% to $93.50, reflecting cautious investor sentiment despite Michael Siler\'s optimistic long-term outlook on Bitcoin and the company\'s dividend strategy.