Standard Chartered has maintained their end-2026 Bitcoin forecast price of $100,000. note The company sent a letter to investors Friday, explaining that the recent decline is due to a lack of effort by Strategy This is an explanation for a shift in strategic direction rather than the deterioration of the balance sheet.
Geoffrey Kendrick, the bank’s global head of digital assets research, wrote that Strategy — the largest corporate holder of Bitcoin, with 843,775 coins, more than 4% of the 21 million that will ever exist — “appears to be pivoting from its ‘never sell Bitcoin’ mantra to a more complex approach.”
The speed of the release from pressure that BTC will experience depends on how effectively this pivot is communicated.
Strategy for 2020 to mid-2025 mNAV — enterprise value divided by the value of its Bitcoin — traded above 1.0. This premium allows the company to issue shares and buy Bitcoins, increasing its value more than that of the newly issued stock. It was important to convince the market the company would not sell.
This arithmetic is no longer valid with mNAV at 1.0. Kendrick stated that Strategy has shifted its focus to holding Bitcoins as backing for STRC (its perpetual preferred stock), which is used as a form of credit.
STRC Feedback Loop
STRC offers a 12 percent annual dividend that is settled in cash twice per month. Rates are reset monthly to maintain the par value of the securities at $100. The largest instrument deployed by Strategy, it has a notional value of about $10 billion.
STRC’s departure from parity, which reached a low intraday of $71.25 in June 26, triggered a negative feedback cycle. After the announcement on June 1 that Strategy sold 32 BTC during the week prior, the divergence began. Standard Chartered says STRC is still trading at around $90. STRC’s USD reserves for dividends are $2.55 billion or 17,4 months worth of coverage.
Bitcoin is a ‘screaming buy’
Problems with “never sell,” Kendrick claimed that the strategy constrains Bitcoin’s perception. Strategy has announced A monetization programme that allows it to sell BTC periodically, with up to 1,25 billion dollars in profits for the Reserve.
STRC, with its Bitcoin backer, is too collateralized, and the price should return to $100. Kendrick said the STRC is similar to what a central banking system would promise to do. “whatever it takes” Credibility is the key to never needing to act.
He stated that effective signals should not require Strategy to ever sell Bitcoin. Kendrick views the incident as noise, rather than an indication of BTC’s long-term trajectory. He calls it a coin at $64,000 “a screaming buy.”
Strategy sold 3,588 BTC JPMorgan analysts estimate that the bank sold about $216m last week. This was its biggest disposal yet. Proceeds were used to pay preferred stock dividends and replenish the reserve. JPMorgan Analysts said Introduces formal sales policy “avoidable two-way risk” Making Strategy both buyer- and seller-focused.
The stock of Strategy traded near $98 Thursday. BTC was above $64,400 Friday.
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Source: bitcoinmagazine.com
