Grayscale: Strategy's leveraged BTC model under pressure, risking further price drops

Strategy's (MSTR) leveraged Bitcoin buying model is under pressure, potentially leading to further price declines for the cryptocurrency, according to an analysis by Grayscale. Cointelegraph reported, citing a recent Grayscale report, that after Strategy sold 32 BTC last Monday, Bitcoin's price fell 16%, accompanied by a drop in MSTR's stock price. Grayscale suggested this could also significantly impact Strategy's preferred stock (STRC), noting that if the company were to increase the STRC dividend rate, it might need to sell more BTC to cover the payments. For the health of the ecosystem, Grayscale added, it is better for companies with diversified revenue models to hold BTC than for supply to be concentrated in a single, BTC-focused firm. However, Augustine Fan, a partner at crypto software firm SignalPlus, stated that while Strategy's BTC sale is being blamed for the recent market downturn, the fundamental reality is that the structural arguments for a bullish outlook are fading.