Liquidity Strategy: How Strategy Ensures Financial Stability for the Next Two Years

MicroStrategy (MSTR), the largest public holder of Bitcoin, has increased its cash reserves to $2.2 billion. This move significantly strengthens the company’s financial buffer in the face of potential market shocks and allows for uninterrupted dividend payments, even if the cryptocurrency market enters a prolonged consolidation cycle. The strategy received additional funds after selling shares, adding $748 million to its cash pile. This level of liquidity greatly reduces the risks of short-term pressure on cash flows.

Expanded Cash Reserve and Multi-layered Protection Mechanism

The accumulated funds of $2.2 billion cover the annual obligations for dividend payments on preferred shares of series STRK, STRC, STRF, STRD, and STRE, totaling approximately $824 million annually. This means that the current liquidity provides the company with a safety margin of two and a half years, enabling it to meet its obligations to shareholders without interruption even during an extended bearish phase in the crypto market.

This time horizon coincides with the expected next Bitcoin halving, which will occur around April 2028. This event reduces miners’ rewards by 50% and has historically coincided with turning points in the market cycle. The planned period of 32 months guarantees uninterrupted dividend payments from 2026 through mid-2028, overcoming the traditional four-year Bitcoin development cycle.

Protection Against Convertible Bonds: Planning for the Years Ahead

Strategy has significant flexibility in managing $1 billion worth of convertible bonds, with the first maturity scheduled for September 2027. At that time, bondholders will have the right to demand the company buy back the bonds or convert them into common shares.

Currently, Strategy’s shares trade in the range of $163–165 each, approximately 12% below the conversion threshold of $183 per share. If the share price remains below this level until September 2027, the company will need to settle in cash. The available liquidity of $2.2 billion fully covers this obligation while maintaining an additional buffer for dividend payments 15 months ahead.

History shows that Strategy prefers converting bonds into shares rather than cash settlement, but the current financial cushion makes the company independent of this scenario. At a conversion price of $183 or higher, bonds will automatically convert, avoiding cash outflows.

Bitcoin as a Strategic Asset: Additional Financial Flexibility

By directly owning 671,268 BTC (current valuation at $78.87K per coin), Strategy gains an additional advantage as an alternative liquidity source. If it becomes necessary to liquidate part of the crypto portfolio to cover obligations, only a minimal portion of reserves will be needed, as the total value of the Bitcoin stack exceeds cash needs many times over.

This approach transforms MicroStrategy from an ordinary company into a hybrid financial instrument with dual sources of stability: traditional cash combined with crypto assets creates extraordinary resilience against external shocks.

Liquidity as a Strategic Advantage in Periods of Uncertainty

The concept of a “USD battery,” introduced by the company’s leadership, emphasizes the critical importance of cash reserves for long-term viability. In conditions of high volatility in the cryptocurrency market, having sufficient cash allows Strategy to avoid forced asset sales at unfavorable moments and to respond to opportunities to expand positions.

The current decline in MSTR stock price by about 45% since the beginning of the year to $163 per share highlights the stabilizing role of liquidity. Despite market shocks, the company maintains full control over its financial obligations, demonstrating investment reliability in an environment of increased turbulence.