Bitwise CIO sees Bitcoin bottom nearing after Strategy deleveraging

The recent slide in Strategy’s STRC preferred stock, which hit a record low of $73.62, reflects a necessary correction rather than structural collapse. Strategy raised roughly $10.5 billion through this instrument to finance its massive Bitcoin holdings. To stabilize the asset, the company recently hiked its dividend to 12% and authorized $2 billion in share buybacks. Crucially, Strategy introduced a capital management framework allowing for potential Bitcoin sales to bolster reserves, ending its tenure as a relentless, one-way buyer of the cryptocurrency.

Hougan compares this transition to the 2021 unwind of the Grayscale Bitcoin Trust premium, noting that while the era of Strategy acting as the market's primary engine is ending, the foundation for a fall rally is forming. He expects institutional players—including pension funds, sovereign wealth funds, and asset managers—to replace Strategy as the dominant force driving demand. While Bitcoin recently ticked above $62,000 following cooling U.S. labor market data, Hougan advises monitoring indicators like MSTR trading discounts and funding rates to gauge the exact turning point.