TLDR
- Bitwise CIO Matt Hougan said Strategy’s role as Bitcoin’s top buyer has likely peaked.
- Hougan expects banks, asset managers, pension funds, endowments, and sovereign funds to drive demand.
- STRC fell below its $100 par value, raising questions over Strategy’s dividend funding model.
- Strategy holds liquid assets well above debt, reducing liquidation concerns, according to Hougan’s analysis.
- Strive CEO Matt Cole argued Strategy’s Bitcoin holdings remain below SEC notable ownership thresholds.
Bitwise Asset Management Chief Investment Officer Matt Hougan said Strategy’s long-running position as the world’s most dominant Bitcoin buyer has likely reached its end. Speaking to jounalist on July 3, Hougan said MicroStrategy’s parent company, now known as Strategy, had served as a one-sided source of Bitcoin demand for years, although he expects that role to fade in the next cycle.
Hougan said future Bitcoin demand is more likely to come from investment banks, asset managers, pension funds, university endowments, and sovereign wealth funds. His comments followed volatility in Strategy’s perpetual preferred stock product, Stretch, or STRC, which traded below its $100 par value in late June.
Bitwise CIO Says Strategy’s Bitcoin Dominance Is Fading
Hougan said Strategy’s Bitcoin buying strategy shaped market structure during the previous cycle because the company repeatedly raised capital and deployed proceeds into BTC. That model made the firm a major institutional holder and a closely watched proxy for corporate Bitcoin exposure.
According to the information cited by Huoxing Finance, Hougan said Strategy holds about $49.6 billion in Bitcoin and $2.6 billion in cash. He added that the company’s assets remain well above its debt and preferred stock obligations, reducing the risk of forced liquidation under current conditions.
The Bitwise executive said Strategy may buy or sell Bitcoin more flexibly under its new digital credit capital framework. He noted that the company is not expected to become a large-scale forced seller, although its role as an aggressive one-way buyer appears weaker than before.
STRC Volatility Raises Questions Over Treasury Model
The debate intensified after STRC dropped from its $100 par value to below $75, according to the supplied market report. The move raised concerns about whether Strategy could maintain dividend payments tied to the product during stressed market conditions.
Hougan described the STRC episode as a late-cycle event and compared it with the 2021 collapse of Grayscale’s GBTC premium. He said both cases involved financial structures that attracted capital seeking yield and low volatility, even though Bitcoin itself does not provide either feature.
Strategy later said it may sell Bitcoin if needed to fund dividend payments and raised its dollar reserves to $2.55 billion. Hougan said that step eased near-term concerns, although it also reduced the perception of Strategy as an uninterrupted Bitcoin accumulator.
Institutional Demand May Replace Strategy Buying
Hougan said the next Bitcoin cycle could depend less on a single corporate buyer and more on broader institutional allocation. He named investment banks, asset managers, pension funds, university endowments, and sovereign wealth funds as the investor groups likely to become larger sources of demand.
Strive Chief Executive Officer Matt Cole pushed back against concerns over Strategy’s market role and said the STRC episode received excessive attention. He noted that Strategy’s reported 847,363 BTC represents about 4% of total Bitcoin supply, below the 5% level often used in U.S. Securities and Exchange Commission ownership reporting discussions.
Hougan also rejected the idea that Strategy faces an immediate liquidity crisis. He said the company holds roughly $52 billion of liquid assets against about $7 billion of debt, and estimated that Bitcoin would need to fall about 70% to near $18,500 before the company faced material pressure.
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