Strategy CEO Says Banks Pushed Firm To Selling Bitcoin: ‘Never Sell’ Was Never A Rule

Strategy CEO Phong Le said that banks pushed the company to show it was willing to sell Bitcoin before treating the asset as usable collateral.

• Le said Strategy’s “never sell” stance was never a formal company policy and that the firm would sell Bitcoin if needed to protect the business. 
• Strategy sold 7,000 BTC this year but added about 170,000 BTC net, increasing its total holdings by 25%. 
• Le also pushed back on the idea that investors must thoroughly understand Bitcoin's workings to hold it, calling the idea "elitist." 

Strategy (MSTR) Chief Executive Officer (CEO Phong Le said banks were unwilling to treat the company's Bitcoin (BTC) holdings as collateral, while Strategy maintained that it would never sell them. 

Le said in an interview with WOLF Financial, published on Friday, that the situation pushed the company to change its approach. Strategy later introduced a digital credit capital framework that included holding more cash, buying back preferred securities, and selling Bitcoin if needed to support its common stock and preferred shares. 

Le said that the lenders asked why they should extend credit against Bitcoin that the company had pledged never to sell. “They wanted to see liquidity and the willingness to sell that Bitcoin,” he said. "That's what we showed." As of September 7, Strategy holds about 845,050 BTC. 

MSTR's price closed up nearly 2% on Friday. On Stocktwits, the retail sentiment around MSTR remained at ‘extremely bearish’ levels, accompanied by ‘low’ chatter levels over the past 24 hours.

Banks Wanted Strategy To Show Bitcoin Liquidity

Le compared the situation to applying for a mortgage. “I want an $800,000 loan, and they're gonna say, okay, so how much money do you have? Do you have a car? What other collateral [do] you have? They would say, well, that million dollars doesn't matter. That's sort of how the banks were looking at our Bitcoin collateral," he added. 

Banks view Strategy’s Bitcoin holdings in a similar way, he said. Credit investors value cash first and are more willing to value Bitcoin when a company shows that it can sell the asset if necessary. 

Le Says ‘Never Sell’ Was Never Formal Policy

Le also said Strategy’s well-known promise to never sell Bitcoin was not an official company policy. “It's a marketing statement that we had, but it wasn't, I will call it, sort of a board-governed decision,” he said. "There’s nothing written down that we would never sell Bitcoin," he added.

Lee said Strategy would sell Bitcoin before allowing its stock to collapse or putting the company at risk of bankruptcy. The company sold 7,000 Bitcoin this year but bought about 170,000 Bitcoin on a net basis, increasing its total holdings by 25%, according to Le. Backing up his statement, Strategy also sold Bitcoin during the 2022 bear market. 

Le Calls Self-Custody Argument ‘Elitist’

Le also rejected the idea that investors must fully comprehend Bitcoin before owning it. “I think it's arrogant to believe that to own an asset you need to understand every single thing about how it works,” he said. He also criticized the view that Bitcoin must be held through self-custody. Le called that position "elitist," and "really not true to the ethos of Bitcoin." 

Bitcoin’s price was trading at $77,451, down over 1% in the last 24 hours. On Stocktwits, the retail sentiment around Bitcoin dipped to ‘extremely bearish’ from ‘bearish’ levels, accompanied by ‘low’ chatter levels over the last 24 hours.

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