Selling bitcoin at $60k and then buying back later at $80k

[The Founding Titan]

At first, I also looked at this Strategy move and thought, “How would someone sell Bitcoin around $60k and come back to buy at $80k?”
But when you look at what actually happened, it wasn't really a normal Bitcoin trade.
Strategy sold about 6,916 BTC at an average of roughly $62,200. They needed the money mainly to handle their preferred-stock obligations and strengthen their balance sheet.
Later, their situation changed. They were able to raise money by selling MSTR shares while the stock was trading at a premium, and they used about $369.7 million of that money to buy 4,603 BTC at $80,318 each.

So their thinking wasn't simply: “Bitcoin will fall, let me sell.” It was more like: “Right now, BTC is the cheapest/most convenient source of cash for what we need to pay.” Then later: “Now we can raise money through MSTR at favourable terms, so let's use that money to buy more BTC.”

That's why their CEO said their Bitcoin decisions are based more on cost of capital and the company's balance sheet than on whether Bitcoin is $60k, $80k or $100k.
Of course, if you're looking at it strictly as a Bitcoin holder, it still looks like a bad deal: sell lower, buy higher, and you don't even buy back everything you sold, They sold 6,916 BTC and only bought 4,603 BTC back, so I wouldn't call it a brilliant Bitcoin trade, it's better understood as corporate financial management using Bitcoin as a treasury asset, and honestly, this is probably the interesting part of Strategy's model now: they are no longer saying Bitcoin can only go into the treasury, they are showing that, when necessary, Bitcoin can also come out of the treasury to solve a financial problem.
Source:
https://pluang.com/en/news-feed/strategi-ceo-phong-le-jual-bitcoin-60k-dan-beli-80k-keputusan-tepat
https://news.bitcoin.com/crypto-news/strategy-phong-le-sell-bitcoin-60k-buy-80k-math/

[Oshosondy]

What I have noticed about Strategy is that the company only want something from bitcoin which they see bitcoin can achieve it. That is bitcoin to remain as a store of value and they see it as a young asset that still have potential to increase very well in the next few years. So they have the plans that if bitcoin continues to increase, their businesses stay strong and become larger.

[un_rank]

Important to note they made a profit on the bitcoins sold when you consider the average price they acquired their portfolio at. Behind their bitcoin exposure there is still business to run and other reserves to balance.
As a bitcoiner I prefer them actually using their bitcoin holdings and not just locking it up.

They still hold over 840k bitcoins in total.


- Jay -

[Sobz]

It is possible at the time they sold bitcoin they have made good profit from their hodling. Buying bitcoin at $80k is nothing bad , the reason to buy is to hodl Bitcoin. You cant question anyone why they sell their bitcoin and you csnt question why they are buying bitcoin at a given price. To you it might be a price that is high that you wont be willing to buy but it is a target for someone else to buy at any opportunity no matter the price. Strategy would sell his bitcoin if he thinks it is the right time for him, so you shouldn't be so concern about it.

[Antidote47k]

They had practical reasons for the sale at the time but still doesn’t change the fact that from a bitcoin perspective, it was a bad trade.
It’s interesting that they didn’t actually buy back the same amount of bitcoin. Intially they sold 6,916 bitcoin for roughly $429M at about $62k, then later bought back only 4,603 at about $80k for $307M, that roughly about 2,300 less than what they Intially had.
This makes me conclude that two things can be true at the same time; the decision may have been rational from a capital management perspective, while still being a bad bitcoin trade.
I do wonder if they could have raised liquidity without needing to sell the BTC in the first place. If that was possible, then the sale ultimately costed them significant upside.

[Zaguru12]

They had practical reasons for the sale at the time but still doesn’t change the fact that from a bitcoin perspective, it was a bad trade.
It’s interesting that they didn’t actually buy back the same amount of bitcoin. Intially they sold 6,916 bitcoin for roughly $429M at about $62k, then later bought back only 4,603 at about $80k for $307M, that roughly about 2,300 less than what they Intially had.
This makes me conclude that two things can be true at the same time; the decision may have been rational from a capital management perspective, while still being a bad bitcoin trade.
I do wonder if they could have raised liquidity without needing to sell the BTC in the first place. If that was possible, then the sale ultimately costed them significant upside.

Yes they were selling for reason and it was stated by them even though I don’t think it should cause a fuzz that they selling because bitcoin is meant for buying and selling but I think people paid attention or place emphasis to why they were selling because of Micheal Saylor earlier comments of never selling and also because of the fact that most people think they sold at a loss since there average buy price is around $75k.

Personally I disagree that it was a bad sale since we don’t know maybe they had some certain holdings they had intended to sell by that period. Let’s not forget that this company started bitcoin accumulation since 2020 at around $11k per bitcoin, they could be selling earlier purchase with the reason to sell recent buys in the future anf this is far from been a bad sale

[Jewan420]

Company strategy and personal strategy will never be the same. Even the kind of decision you make in Bitcoin investment may not work for a company. An individual needs savings, but a company needs profits. You can have an emergency fund for emergencies, but a company emergency is so expensive that it may be difficult to cover it with emergency funds.

Since they are one of the whale investors in the world, they probably know better than us what to do and what will benefit them. From a general perspective, the decision is not ideal at all, but you have to make tough decisions to survive the organization at some point.

[ColdLava40]

Personally I disagree that it was a bad sale since we don’t know maybe they had some certain holdings they had intended to sell by that period. Let’s not forget that this company started bitcoin accumulation since 2020 at around $11k per bitcoin, they could be selling earlier purchase with the reason to sell recent buys in the future anf this is far from been a bad sale

True, I don't think it would be right to call Strategy's move a bad sell. They started accumulating Bitcoin long before the last bull run, so selling some of their holdings doesn't necessarily mean they sold at a loss.

They had already bought some of those coins much earlier, so it's very possible that they were taking profits from those positions.

I think what surprised people was that nobody expected Strategy to be among the first major Bitcoin holders to sell during a bear market. They have always had this very strong "never sell your Bitcoin" mentality, so seeing them sell naturally made people question whether their conviction had changed.

But I don't think Saylor is just selling randomly. There was probably a reason behind the move, especially considering the company's financial position and obligations. And now that they are buying Bitcoin again, it makes the whole thing look more like a calculated move rather than them losing faith in Bitcoin.

Sometimes you have to look beyond the actual sale and understand why the company decided to do it in the first place.

[Cryptomultiplier]

It pays to be fluid as water instead of to be rigid as a rock, when it comes to business and mostly  when one intends to remain profitable in business, because at a time, Strategy was all about accumulation of more Bitcoin until reality hit their balance sheets and they saw their reserves as a safe haven asset to remedy their situation.

I just know one thing and that is at any price BTC is at, a company or retail investor committed to holding Bitcoin would acquire more because the prospects of making 2x or more the returns on investment in the future is a huge possibility due to volatility and the ever present possibility of the emergence of a new ATH anytime.

[PrivacyG]

Of course, if you're looking at it strictly as a Bitcoin holder, it still looks like a bad deal: sell lower, buy higher, and you don't even buy back everything you sold, They sold 6,916 BTC and only bought 4,603 BTC back, so I wouldn't call it a brilliant Bitcoin trade,

It is a bad deal, even if it was 'the cheapest way' for them to do it.  If your numbers are correct, they are more than 2300 Bitcoin short.  Call that how ever you want, I will call it as it is.  I find it fascinating how people look through EVERY possible reason and find a way to always turn any thing into hype.

Speaking of hype.  At the end of the day Michael Saylor has less Bitcoin, multiple other people now have more, I would call that a win for all of us.

[arwin100]

Of course, if you're looking at it strictly as a Bitcoin holder, it still looks like a bad deal: sell lower, buy higher, and you don't even buy back everything you sold, They sold 6,916 BTC and only bought 4,603 BTC back, so I wouldn't call it a brilliant Bitcoin trade,

It is a bad deal, even if it was 'the cheapest way' for them to do it.  If your numbers are correct, they are more than 2300 Bitcoin short.  Call that how ever you want, I will call it as it is.  I find it fascinating how people look through EVERY possible reason and find a way to always turn any thing into hype.

Speaking of hype.  At the end of the day Michael Saylor has less Bitcoin, multiple other people now have more, I would call that a win for all of us.

Whatever things they said and even if they create hype on the latest accumulation done by Strategy.

It doesn't erase the fact that they sold at low and buy at more higher price. That's show how bad their decision making for doing such action.

There's no profit to get if they frequently do that. People have this impression that Strategy maybe do that purchase to impress their shareholders, but many people following them are truly disappointed with latest situation happening in their company.

[Sanitough]

What I have noticed about Strategy is that the company only want something from bitcoin which they see bitcoin can achieve it. That is bitcoin to remain as a store of value and they see it as a young asset that still have potential to increase very well in the next few years. So they have the plans that if bitcoin continues to increase, their businesses stay strong and become larger.

Exactly. That's why they can never leave bitcoin because it becomes their fixer or solution whenever other businesses or investments are doing badly. So when they sell bitcoin at its lower price, it was certainly their own strategy to save other business and get back to bitcoin when that business already in profits.

This could also create a good reflection that selling bitcoin at a lower price is never bad especially if you have other plan or intention, it only gets bad if you sell early and have never seen any opportunity to buy back bitcoin or return investing in the crypto market.

[Fiatless]

They indeed had some financial obligations that warranted them selling some Bitcoins. Yet I still see it as a bad deal. Strategy is experienced and understands how the market works. If the company had done its projections well, it would have sold during the bull run and kept the money for future financial responsibility. The company might have made a profit from the sales since they bought some Bitcoin below the price they sold. But I was displeased that the company doesn't have solid financial backing to run the firm without selling Bitcoin during the bear market.

[nelson4lov]

I don't agree with that reasoning because it makes no sense to sell a huge amount of bitcoin at $60k when they still hold billions of USD worth of Bitcoin. One way or another, it was a silly move. The reality is that Strategy was in a deep hole and even their STRC preferred stock lost its pegged and dipped hard. The better decision would've been for them to sell a bit of their stash when the price was a lot higher say $125k down to $100k.

At the time they sold, Bitcoin's price was below their average purchase price.

[PrivacyG]

It doesn't erase the fact that they sold at low and buy at more higher price. That's show how bad their decision making for doing such action.

It does not have to necessarily be a bad decision and I do not believe they should be seen in a negative light for it.  It was simply what they had to do, for them it may be 'the best' but, you know, in some situations 'the best thing' you can do is sell the roof above your head because there is no other way to solve them.

[Ojima-ojo]

Bitcoin reserve for companies is intended for various needs and obligations, micro strategy Bitcoin buying and selling have been without much consideration of the price at the time of buying or selling, you can see how the company buy Bitcoin even when the price is high without minding, what that should tell us is they position on Bitcoin as store of value and not a means to make profits quick.


Micro strategy understand the fundamentals of investment and financial reshuffling for companies liqudities flexibility that is why you see them diversifying into various new developments that tend to keep them in the market as top player's, you are then generally right that strategy can sell Bitcoin not for profits but for the need of the money to fund other investments of the company.

[Asuspawer09]

I mean it wasn't something like buying low and selling high since in the end of the day it was still a business plus they weren't really doing it just to spend the money into something it was used for the business paying debts, and having a strong balance sheet on the company, that gives them a lot of credibility since they don't have debt and also they have cash reserves as well, so they have a huge leverage on the business. It was necesarry at some point in a business, cashflow was always a thing. It wasn't like they made some mistake, these are just some companies converting their assets.

It usually happened that a lot of companies that were holding Bitcoin were taking profit to hold some cash at some point. Most of the time, the market price value doesn't matter because it was for cash flow, and in reality you can't really control the market or time the market, so we would see some companies news selling even though we are in a bear market. They're just filling other funds, restructuring, and reinvest again on Bitcoin once they've already recalibrate there funds.

[Churchillvv]

My perception about their performance or decisions on buying and selling is that they still bitcoin as cheap compared to what they know as bitcoin maximum capacity in this bull run or another bull run so they can afford to sell now and still get to buy back yet, we are scared for them because we have less capital and see a $10k change in price as a very big deal but it’s really not.

[aoluain]

I believe Strategies Bitcoin game is long term and possibly very long game.

The amounts of Bitcoin being sold are massive by our calculations but by Strategies calculations
they are very small percentages.

In the grand scheme of things and fast forward to the next ATH, it wont even be a memory.

For us buying and selling in those patterns, sell low and buy high would wreck us.

[mirakal]

The decision of Strategy to sell at $60k and buy back at $80k is clearly against the basic rule of buying low and selling high. But if selling early means making profits that would save other business problem, I don't think that's a bad trade. Strategy still benefit from it, and that's the most important there. They will buy and sell regardless of the current price, because they don't come here to invest for their retirement, but they just take advantage of the short term profits that they can gain from bitcoin. If you are also doing another business, you will understand their point of view.

The thing is, they use bitcoin as a tool to grow other businesses as well, and I think that's a brilliant idea. In the end, they will benefit from all their investments, most especially with bitcoin.