Strategy Climbs on CFTC Crypto Futures Move as Financing Questions Persist

The rally added around $3bn to Strategy's market capitalization, according to data from Yahoo Finance. 

Strategy is the largest corporate holder of Bitcoin, with 843,738 BTC on its balance sheet valued at approximately $61.3bn. The stake represents about 4% of Bitcoin's total supply, according to CoinGecko. 

The rally comes as investors continue debating Strategy's finances. While some supporters argue that Saylor has repeatedly found new ways to raise money and grow the company's Bitcoin holdings, others say its growing obligations could become harder to manage if Bitcoin falls or remains weak. 

As of 16:08 UTC, BTC traded at $73,900, up 1% on the day but down roughly 16% so far this year.

New CFTC moves

The rally followed two developments in the crypto derivatives market. Earlier on 29 May, prediction market platform Kalshi said it had received regulatory approval to launch Bitcoin perpetual futures, becoming the first company to offer the products in the US under the CFTC oversight.

"Perpetual futures are the next chapter. They remove a constraint," said Tarek Mansour, CEO of Kalshi. "If a prediction market is a photograph of what the world thinks right now, a perpetual is a film — continuously updated, never ending, always present." 

The CFTC also issued guidance on 29 May related to cryptocurrency exchange Coinbase's plans to offer certain derivatives through Deribit, the crypto options exchange it recently acquired.

The agency said the contracts described by Coinbase could be treated as foreign futures under existing rules, potentially creating a regulated pathway for US traders to access products linked to offshore markets. It also said Coinbase could allow customers to post certain cryptocurrencies and stablecoins as collateral, provided the exchange meets requirements. 

Coinbase chief executive, Brian Armstrong, called the decision a major development for US traders in a post on X. "Until now, US users have been locked out of ~80% of global crypto markets (perpetual futures and options). But not anymore!," he wrote. 

Strategy debate heightens

Despite the regulatory win and its stock rally, questions persist over how Strategy is funding its continued Bitcoin purchases.

Jeff Dorman, chief investment officer at asset manager ARCA, argued on 29 May that Strategy has made its finances more complicated as it looks for new ways to fund Bitcoin purchases. Dorman noted in a post on X that the company has issued $15bn of preferred stock, which comes with about $1.5bn in annual dividend payments.

He also questioned why Strategy used cash to buy back some of its debt after previously raising $2bn to strengthen its reserves. According to Dorman, the company now has about $871m in cash reserves, giving it less room for error if market conditions worsen.

"TLDR – this is the first time that MSTR, BTC and Pref holders are really in bind," he cautioned. "Someone is going to lose badly here, and it will happen in the next 4 months." 

Some experts agree

Dorman is not alone in raising concerns. Charles Chong, vice president of strategy at BlockSpaceForce and a former strategy director at Foundry, told Sandmark that Strategy's increasingly complex financing structure is becoming harder for investors to ignore.

Still, Chong argued that selling Bitcoin would be counterproductive. "Strategy's mNAV is currently 1.2, which is above one, so it would make no sense to sell BTC," he said. "If anything, Strategy should sell MSTR stock to boost its reserves." 

He added that investors appear increasingly uncomfortable with Strategy's shrinking cash cushion, pointing to STRC's – one of Strategy's publicly traded preferred-share products – decline below $99 in May as a sign of those concerns.

He further questioned why the company chose to buy back debt before rebuilding its reserves and argued that selling stock while Strategy's mNAV remains above one would be a better option if additional cash is needed.

Ryan Kirkley, CEO of Global Settlement Network, told Sandmark that said Strategy weakened its safety net when it used cash to buy back debt instead of keeping those funds available for future obligations.

"A company selling investors a 'fortress balance sheet' just traded two years of runway for six months to make a debt table look cleaner," he said. Kirkley added that investors are beginning to recognize risks that have been building within Strategy's financing model for some time. 

"Simply put, the market isn't overreacting, but it's finally pricing what the architecture always implied; a pyramid on structurally flawed foundations," he said. 

'Drastically overstated'

However, not everyone believes the situation is as severe as critics suggest. Eneko Knorr, the CEO of Stabolut, said he doesn't understand the concerns about Strategy's financing model.

"Dorman's critique fixates on the $1.5bn preferred dividend obligation, but that’s a calculated, easily serviced cost of capital given their immense liquidity and ATM market demand," Knorr explained. "Retiring the 2029 debt at a discount isn't a red flag—it's just smart, aggressive balance sheet management that swaps mature debt for perpetual capital."

Knorr argued that Strategy's newer financial products, including STRC, represent a major evolution in how investors can gain exposure to Bitcoin.

"They've successfully packaged Bitcoin exposure into a high-yield format that traditional institutions actually want," he said. According to Knorr, concerns that a decline in Bitcoin's price could trigger a crisis are unfounded because the company's structure was designed to avoid forced liquidations.

He also added that the products could attract new pools of institutional capital that otherwise would not invest directly in Bitcoin. "The model isn't 'out of hand' – it's evolving," he said.