Grayscale: Bitcoin's Future May Enter 'Recovery Phase' in the Coming Months, but a Sustainable Bottom Formation Still Requires Support from New Buyers

BlockBeats News, June 5th. Grayscale's Director of Research, Zach Pandl, stated in a post that after Strategy disclosed the sale of 32 BTC on June 1st, it triggered a new round of BTC market volatility. He pointed out that the sale size itself was not significant, as Strategy still holds about 840,000 BTC on its balance sheet, worth around $55 billion. However, as one of the world's largest digital asset treasuries, a shift in its strategy has put pressure on market sentiment.

Pandl believes that the recent volatility has affected the price of Strategy's Variable Rate Convertible Preferred Shares (VRCPS). The design target of VRCPS is to maintain a price of around $100 per share, with the current dividend yield at 11.5%. If the share price falls below $100, it means investors are demanding a higher return. Strategy can increase the dividend, but this will increase future cash flow obligations and may lead to more BTC sales, further suppressing the BTC price. Strategy's leveraged business model is under pressure, increasing volatility in the entire BTC market. At current levels of STRC and MSTR stock prices, Grayscale believes that Strategy's ability to continue accumulating more BTC is limited.

However, Grayscale believes that in the long term, reducing leveraged digital asset treasury assets on the balance sheet and distributing more BTC to diversified corporate balance sheets will benefit the health of the Bitcoin ecosystem. But until a sustainable bottom is formed in the BTC price, other buyers need to enter the market. Grayscale expects the BTC price to recover in the coming months, but in the short term, BTC performance may lag behind other crypto market sectors more directly benefiting from regulatory clarity.