Strategy sold Bitcoin at prices as low as $59,256 this summer, then bought it back weeks later at $80,318. The reversal highlights a strain that runs through the wider Bitcoin treasury company sector, where several peers are also under pressure.
Selling low, buying high
Between June 30 and Aug. 10, Strategy sold Bitcoin four times, at prices ranging from $59,256 to $64,262. Then, on Aug. 31, the company made its first Bitcoin purchase in weeks, buying at $80,318.
Taken together, the trades put Strategy on the wrong side of the basic investing principle of buying low and selling high. Bitcoin itself traded at $77,348, up 0.55%, or $422.05, on the day.
Why the company sold at the lower price
Strategy needed the money. It sold off part of its Bitcoin holdings to fund ongoing operations and make payments on its preferred stock offerings, accepting whatever price the market offered at the time. The strategy only works if Bitcoin's price is rising; during June and July, when the price was declining or trading sideways, it did not.
Maybe the summer sales were a one-time event, and Bitcoin's price climbs again from here. But Strategy wants investors to see it that way, without admitting there is a flaw in its own Bitcoin treasury company model.
A wider slump among treasury companies
Several other Bitcoin treasury companies show the same strain. Some trade for less than the combined value of their Bitcoin holdings, some are winding down operations, others are pivoting into AI or consolidating with larger peers.
The stock performance underlines it: Strategy is down 58% over the past year, Twenty One Capital is down 71%, and Strive is down 78%. For a brief period, these companies outperformed Bitcoin directly. Over the long haul, none of them have matched it.
Source: The Motley Fool
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