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Strategy CEO Mr. Fong Lee confirmed that the company’s financial position remains solid despite the sharp decline in Bitcoin prices, suggesting that the digital currency would need to fall to around $8,000 and remain at that level for five or six years before it poses a real threat to the company’s budget and its ability to repay convertible debt.
During the Q4 results announcement seminar, Lee explained that only such a tragic scenario would bring the company’s Bitcoin reserves to equal its net debt, which could force it to restructure its obligations or resort to issuing additional stock or debt.
The statements come amid investor doubts about the impact of Bitcoin’s recent decline on the financial health of the largest publicly traded company owning the digital currency Bitcoin.
“Strategy” recorded a net loss of US$12.6 billion this quarter, mainly due to unrealized losses on the digital currencies it held after the price of Bitcoin fell below the average purchase cost.
Chief Financial Officer Andrew Kang underlined the company’s commitment to a long-term approach, emphasizing continued implementation even in a highly volatile environment.
Michael Saylor, executive chairman of the board of directors, emphasized that the strategy followed was designed to withstand severe price fluctuations in the short term and called on investors to focus on positive fundamentals, especially the supportive regulatory transformation in the United States.
The announcements came amid a major sell-off in the cryptocurrency market, with Bitcoin prices down about 9% in 24 hours, while the company’s shares fell more than 17% in one session.
Thaler also addressed the fears associated with quantum computing, describing it as a campaign of exaggerated fear and uncertainty, considering any real threat is still a decade or more away.
He explained that Bitcoin, like other financial and defense systems, can be upgraded to become more resistant, signaling the company’s intention to work with the global cybersecurity community to launch a Bitcoin security initiative.
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