Strategy (MSTR) has temporarily suspended its Bitcoin (BTC) purchases as it increases its cash reserves.
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Over the past week, Strategy did not buy any Bitcoin. Instead, the software company turned serial crypto acquirer has increased its cash reserves by $2.19 billion. Analysts say that reinforcing its cash reserves is a sign that Strategy is preparing for an extended cryptocurrency downturn.
Strategy, which was formerly known as MicroStrategy, raised $748 million through common stock sales in the week ended Dec. 21, according to a regulatory filing with the U.S. Securities and Exchange Commission (SEC).
Pausing Bitcoin Purchases
The pause in BTC purchases and cash raise comes after Strategy bought $2 billion worth of Bitcoin in the previous two weeks. Strategy’s total Bitcoin holdings are now worth about $60 billion, making it the world’s largest corporate owner of the cryptocurrency.
Earlier in December, Strategy, which is run by Executive Chairman Michael Saylor, established a $1.4 billion reserve designated for future dividend and interest payments, addressing concerns that the company might be forced to sell some of its Bitcoin if prices continue to fall.
Strategy has gotten defensive as the price of Bitcoin has fallen about 30% since mid-October. During the same period, MSTR stock has declined 50%.
Is MSTR Stock a Buy?
Strategy’s stock has a consensus Strong Buy rating among 14 Wall Street analysts. That rating is based on 12 Buy and two Hold recommendations issued in the last three months. The average MSTR price target of $467.75 implies 182.59% upside from current levels.
