Bitwise CIO: Strategy Firm Has No Obligation to Sell Bitcoin

Source: CryptoNewsNet Original Title: Bitwise’s Chief Investment Officer Announces Strategy Firm Has No Obligation to Sell Bitcoin Original Link:

Bitwise CIO Denies Claims of Forced Bitcoin Liquidation

Bitwise Chief Investment Officer Matt Hougan has strongly denied recent claims that Strategy may be forced to sell Bitcoin, calling this view “completely flawed.”

In a note titled “No Virginia, Strategy Will Not Sell Bitcoin” sent to investors Wednesday night, Hougan addressed two key concerns: whether Strategy would be removed from MSCI indexes and whether that would force the company to reduce its multi-billion dollar Bitcoin position.

MSCI Index Removal Concerns

Hougan noted that MSCI is considering removing companies holding digital asset treasuries from its index. The decision will be announced on January 15th, with a 75% chance that Strategy will be removed. While JPMorgan predicted such a decision could trigger a $2.8 billion sale of Strategy shares by passive funds, Hougan emphasized that the impact of index additions and deletions is often exaggerated.

He pointed to Strategy’s addition to the Nasdaq-100 last year as evidence, noting that despite funds purchasing $2.1 billion worth of shares, the stock price barely moved. He added that recent market declines had already priced in this potential scenario.

Financial Stability and No Forced Sales

Hougan addressed the core concern: whether dropping out of the index could push the stock below its net asset value and force the company to sell Bitcoin. He emphasized this scenario was unrealistic, highlighting that the company maintains $1.44 billion in cash reserves to cover dividends and debt interest, with the first debt maturity not due until 2027.

Strategy purchased an additional 130 BTC this week, bringing its total holdings to 650,000 BTC. Hougan concluded that there is no near-term mechanism that will force the company to sell Bitcoin, and that the market should focus on larger structural issues rather than index-related concerns.

This is not investment advice.