Strategy Inc., a prominent player in the digital asset arena, has made a significant announcement regarding the establishment of a USD Reserve totaling $1.44 billion. This strategic move aims to bolster dividends on preferred stock and manage outstanding debts as part of its financial strategy for the approaching fiscal year ending December 31, 2025.
The reserve was funded through the sale of Class A common stock as part of the company’s at-the-market offering program. Looking ahead, Strategy intends to maintain this reserve to cover at least twelve months of dividends, with a long-term goal of extending that coverage to 24 months or more. Michael Saylor, the company’s Founder and Executive Chairman, noted that the establishment of this reserve is crucial for navigating the inherent volatility of the market, reinforcing the company’s vision to lead in the Digital Credit space.
Currently, Strategy holds around 650,000 bitcoins, constituting about 3.1% of the total supply, and the new reserve is projected to cover approximately 21 months of planned dividends. Phong Le, the President and CEO, highlighted the role of the USD Reserve in ensuring stability for investors while aiming for growth in bitcoin holdings.
In conjunction with the USD Reserve announcement, Strategy has also updated its earnings guidance and key performance indicator (KPI) targets for the fiscal year 2025. Following the recent fluctuations in bitcoin’s market price—from an estimated $111,612 in late October to as low as $80,660 in late November—the company is reassessing its expectations based on a more conservative bitcoin price range of $85,000 to $110,000 by year-end 2025.
As a result, the updated guidance reflects a potential operating income ranging from a loss of approximately $7 billion to a profit of $9.5 billion, with net income expectations between a loss of $5.5 billion and a profit of $6.3 billion. Moreover, the estimated diluted earnings per share is set between a loss of $17.00 to a gain of $19.00 per share. These assumptions are contingent on the successful execution of capital raises to meet the company’s bitcoin yield target.
Additionally, Strategy is committed to leveraging its substantial bitcoin holdings while adhering to new accounting standards that require cryptocurrency assets to be reported at fair value, reflecting the volatility of the market. This strategy emphasizes the unique position of Strategy as a recognized leader in both the bitcoin ecosystem and enterprise analytics innovation.
As Strategy Inc. continues to adapt to the dynamic digital asset landscape, its focused approach on managing reserves and guiding investors through uncertain market conditions reflects a commitment to long-term growth and resilience in the digital economy. The establishment of the USD Reserve stands as a testament to its proactive measures aimed at supporting current and future stakeholders.