Why Is Strategy Building a $1.44 Billion Cash Reserve? Ensuring Dividends and Liquidity Stability

Strategy Latest Trends

On December 1, 2025, Strategy officially announced through its announcement that it has established a USD Reserve of $1.44 billion. This reserve was set up by the company through the funds raised from the “at-the-market” (ATM) public offering of Class A common stock. According to the announcement, Strategy sold approximately 8.214 million shares of Class A common stock from November 17 to 30, 2025, raising net financing of about $1.478 billion to build this reserve.

At the same time, the company has not given up on accumulating Bitcoin – it has newly purchased about 130 BTC, bringing its total holdings to 650,000 coins.

What is the 1.44 billion USD “USD Reserve”

This reserve fund is a cash pool established by the Strategy to ensure its obligations for external dividends/interests. According to the official statement, this reserve will be used for:

• Payment of preferred stock dividends
• Interest on outstanding indebtedness of the payment company

The company stated that the current reserves are sufficient to cover the aforementioned obligations for at least 12 months, while the company will strive to expand the reserve size to cover 24 months or longer. In terms of the company size, this cash reserve accounts for approximately 2-3% of its enterprise value, equity value, and the value of its Bitcoin assets.

Why Set Reserves at This Moment: Background and Motivation

• Bitcoin (BTC) prices are highly volatile — recently, Bitcoin prices have significantly fallen from their highs, posing liquidity and stability risks for companies that rely on Bitcoin as their primary asset reserve. Relying on BTC as the sole value reserve may not ensure dividends or debt payments during price downturns. Establishing cash reserves is a means to hedge against volatility and prevent being forced to sell BTC in unfavorable market conditions.
• Preferred stock and the fixed obligations arising from the debt structure - Strategy has raised funds in recent years through the issuance of preferred stock and debt instruments (such as convertible debt) to continuously purchase Bitcoin. However, these financial instruments bring obligations for regular payment of dividends or interest, requiring stable cash flow support. Establishing USD reserves ensures that payment commitments can be met, even if BTC does not generate cash flow.
• Enhancing market and investor confidence - In a situation of high volatility, where market confidence in crypto assets is wavering, strengthening the capital structure through cash reserves is more likely to gain recognition from conservative and institutional investors than relying solely on Bitcoin. This is also an important step for the company towards a more robust and traditional financial structure.

The significance of reserves for companies and investors

• For holders of preferred stocks/bonds: The increase in cash reserves enhances the certainty of Dividend/interest payments and reduces the likelihood of payment risks due to a decline in BTC prices, serving as an important safeguard for earnings stability.
• Regarding the overall financial stability of the company: the dual reserve structure of cash + BTC helps to balance the tension between the high risks brought by digital assets and the stable cash flow of traditional assets, enhancing the company’s ability to cope with market turmoil.
• On long-term strategy and capital market positioning: This move may mark the transformation of Strategy from a “pure Bitcoin treasury” to a hybrid company with a “traditional financial structure (cash reserve + debt/equity)”, which is beneficial for expanding its financing channels and attracting different types of investors.
• Demonstration effect on the cryptocurrency asset industry: As an important pioneer in the industry, if Strategy’s cash reserves + stable dividend model succeeds, it may provide a reference path for other large cryptocurrency holding companies - even if heavily invested in digital assets, traditional financial stability should also be considered.

Risks and Market Doubts

• Dilution of capital / Concerns over preferred stock value: To raise cash and establish reserves, the company completed financing through the sale of common stock (Class A common stock). Existing shareholders or preferred stockholders may face the risk of capital dilution and the dilution of their equity.
• The cash reserve scale remains limited and can only cover short-term obligations: $1.44 billion can cover 12–24 months of Dividend/debt, but compared to the company’s massive BTC asset scale and potential long-term obligations, this is merely a “buffer” and is insufficient to completely eliminate structural risks.
• If BTC continues to decline or the market liquidity tightens, the company may still face pressure to sell Bitcoin or issue additional shares — thus affecting the credibility of its “long-term holding of BTC appreciation” strategy.
• Doubts about the stability of the Strategy model from the outside: some analysts believe that the financial structure of companies heavily reliant on Bitcoin is fundamentally different from that of traditional companies. Even with cash reserves, it may still be difficult to remain completely stable in extreme environments due to the large scale of debt/preferred stock.

Outlook: The future strategy of Strategy

Establishing a US dollar reserve is an important strategic adjustment by Strategy in the current market environment — it indicates the company’s high regard for cash flow stability, dividend responsibility, and the robustness of its capital structure.

Possible future development directions include:

• Continue to expand cash reserves: If the market remains highly volatile, the company may gradually increase the proportion of USD reserves to cope with uncertainty over a longer period.
• Balance BTC reserves with cash/liquidity assets: no longer solely relying on Bitcoin appreciation, but instead building a diversified asset/liquidity structure to reduce the risk of a single asset bubble.
• Attracting institutions and conservative investors: By establishing a robust financial structure, preferred stocks, bonds, and common stocks become more attractive, expanding the financing and investment base.
• Establishing a new paradigm for cryptocurrency asset companies: If this reserve strategy is validated, more companies with significant holdings in digital assets may follow suit in the future by incorporating traditional cash or income-generating assets into their asset allocation to enhance stability.

Conclusion

The strategy of establishing a reserve of 1.44 billion USD is a significant strategic move to cope with the volatility of the cryptocurrency market and fulfill its dividend and debt obligations. By utilizing a dual reserve of cash + Bitcoin, the company has not only enhanced liquidity security but also provided more certainty for investors. This initiative may mark a turning point in the governance, capital structure, and financial management of cryptocurrency companies — moving from a single “digital asset dependency” model to a new path of “mixed assets + stable cash flow + traditional financial structure.”

For investors holding preferred stocks/bonds or considering investments in such assets, this adjustment by Strategy is worth close attention - it is both a correction of past practices and may define the future risk management standards for cryptocurrency companies.