Strategy (formerly MicroStrategy) has established a $1.44bn cash reserve to guarantee dividend and interest payments for the next two years, effectively constructing a defensive moat around its Bitcoin treasury to prevent forced selling during market downturns.
Strategy Builds $1.44bn Cash Moat to Protect Bitcoin Hoard
1 December 2025 - 15:08 CET
By Stu Clelland
In a press release issued today, the company announced the creation of a "USD Reserve" funded by recent stock sales. The war chest is sufficient to cover 21 months of obligations, with plans to expand it to cover two full years, Strategy said.
The defensive pivot
The move directly addresses market fears that a prolonged crypto winter could force the company to liquidate part of its 650,000 BTC treasury to service its debt or pay dividends on its preferred stock.
“Establishing a USD Reserve... will better position us to navigate short-term market volatility while delivering on our vision,” said Executive Chairman Michael Saylor.
This effectively neutralizes the "kill switch" risk CEO Phong Le alluded to earlier in the week. By pre-funding nearly two years of liabilities in cash, Strategy ensures it does not need to touch its Bitcoin stack even if the stock premium collapses or Bitcoin prices remain suppressed.
Guidance slashed
However, the company was forced to slash its financial outlook for 2025 following Bitcoin's recent slide.
Strategy updated its guidance to assume a year-end Bitcoin price of between $85,000 and $110,000, down sharply from its previous assumption of $150,000.
Under the new "bearish" scenario ($85k Bitcoin), the company projects a potential operating loss of up to $7.0bn for FY2025, driven by fair-value accounting rules that require it to mark its holdings to market. Conversely, if Bitcoin rallies to $110k, operating income could hit $9.5bn.
Market reaction
Despite the defensive reassurance, the market focused on the lowered guidance. Shares of Strategy (MSTR) traded at $168.88 in pre-market action at 08:54 ET, remaining under pressure as Bitcoin struggled to reclaim the $86,000 level. The stock closed at $178.43 on Friday.
Key metrics updated
- Bitcoin holdings: 650,000 BTC (approx. 3.1% of total supply).
- BTC yield target: Lowered to 22%–26% (previously higher).
- USD reserve: $1.44bn (covers 21 months of payouts).
