Strategy Eyes Bitcoin Lending Partnerships With Big Banks

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Ah, the joy of high finance! Phong Le, the mastermind CEO of Strategy, has recently signaled that the company might one day take a wild leap into lending its Bitcoin holdings. But only once those big US banks have gotten their act together and rolled out institutional-grade custody and lending infrastructure. Until then, they’ll stick to their tried and tested “buy and hold Bitcoin” strategy. How quaint, how simple, how utterly predictable. 😌

Building A Dollar Buffer Around A Bitcoin Core

On December 2, during a delightful chat on Bloomberg Crypto, Le regaled us with tales of how Strategy carefully built a $1.4 billion dollar reserve, despite the fact that Bitcoin prices have seen their fair share of dramatic dips. You see, even when BTC prices plummeted from their October peak of $125,000 to a ghastly 17% decline in November, Le kept his cool, explaining that the reserve was there to fund dividends and interest-because, you know, it’s always nice to have a rainy-day fund when your assets are as volatile as Bitcoin.

Le, ever the strategist, cleverly framed Strategy’s balance sheet as a “barbell” between long-term Bitcoin exposure and short-term dollar obligations. “We buy and hold bitcoin,” he assured, giving us all the warm fuzzies. “That is our primary treasury reserve asset. And we have short-term dollar obligations created because of the dividends we have on our preferred notes.” Well, that’s just perfectly sensible, isn’t it?

To avoid the dreadful prospect of selling Bitcoin when the company’s equity trades near-or heaven forbid, below-the value of its holdings, Strategy created a devoted US dollar reserve. Le was positively ebullient about this decision: “Let’s have the global reserve digital asset, bitcoin, for the long term, and the global reserve digital currency for the short term.” Because when you have global reserves, why not make sure you have all your bases covered? 💼

Le also casually mentioned that the company recently issued equity “in 8.5 days” to pre-fund nearly two years’ worth of dividends. But wait, there’s more! He now aims to maintain a cash buffer equal to “two to three years of dividends,” a policy he plans to uphold for “the next five or ten years” before reassessing. Sure, no rush, why not wait ten years for a rainy day? ⏳

And, of course, Le was keen to defend the company’s insistence on continuing its dividend payments. “Suspensions create fear, uncertainty, doubt,” he explained, with all the gravitas of a seasoned financial sage. “Our objective is to pay the dividend into perpetuity. Never say never, but I think preserving the payment of the dividend is the right thing for the short term.” Well, if you say so, Phong. We wouldn’t dream of questioning your wisdom. 😏

And lest anyone worry that Strategy might be at risk of overleveraging or selling Bitcoin in a panic, Le put those fears to bed. The company’s leverage is a modest 12% on its debt alone, and 27% when including preferreds. Far less than the “60% to 80%” you’d typically see at a run-of-the-mill US public company. Strategy, it seems, is all about responsible financial management. Can’t fault them for that! 📊

Le even pushed back against MSCI’s suggestion that “digital asset treasury” companies could be excluded from indices. He was quite adamant that Strategy is a “fully integrated, vertically integrated bitcoin operating company” that buys Bitcoin, issues securities, creates products, generates operating income, and employs a full corporate staff. In other words, they should be trading at a premium, naturally. 😌

From HODL To Considering Bitcoin Lending

Now, in the most shocking twist of all-brace yourselves-Le revealed that Strategy’s business model might evolve. Yes, you heard right: They’ve been keeping things “very simple” so far, sticking to their beloved “buy and hold Bitcoin” approach. But now, with traditional finance getting a bit more interested in BTC offerings, Le might just entertain the idea of Bitcoin lending. He says that over the next year, the big banks will offer custody, lending services, and staking, and when they do, well, Strategy will be “enthusiastic” to partner up. After all, who wouldn’t be thrilled by the prospect of the big boys entering the game?

Le added, almost nonchalantly, that Strategy has already had “a lot of constructive discussions” with large US banks exploring Bitcoin custody, exchange, and lending. He’s “excited to partner with them” once those platforms are fully in place. Well, that’s all very diplomatic, isn’t it? 🤝

And just to keep us all up to speed, Bitcoin was trading at $92,997 at press time. It’s almost like the entire market is waiting with bated breath for the next big move from Strategy. 🤑

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2025-12-04 06:25