The Trump Era: New Changes in Corporate Strategy and Bitcoin Policy

Recently, global capital markets are undergoing a significant transformation driven by political winds and economic policies. Against this backdrop, a publicly listed company known for its large-scale purchases of Bitcoin, Strategy, suddenly announced a halt to its new Bitcoin purchasing plans. However, during the latest earnings call, the company set a target of $10 billion for its 2025 annual "Bitcoin Dollar Revenue." This seemingly contradictory move has sparked widespread discussion in the market.

As the world's largest enterprise-level Bitcoin holder, Strategy held 450,000 Bitcoins as of February 7, 2024, with an average cost of about $62,000. This holding ranks among the top five Bitcoin holders globally, accounting for approximately 2.38% of the total Bitcoin supply. Such a scale of holdings not only highlights Strategy's leading position in the crypto asset space but also makes its holding changes an important indicator for global investors' attention to the cryptocurrency market.

For investors who are accustomed to viewing Strategy as "digital gold reserves", the company's recent strategic adjustments have undoubtedly sparked heated discussions. Behind this seemingly "inconsistent" strategy lies the reflection of the multiple challenges and considerations faced by the company.

Firstly, the company recorded a net loss of $3.03 per share in the fourth quarter of 2024, despite the doubling of its Bitcoin holdings, which far exceeded analyst expectations. This is mainly attributed to a significant impairment charge on its digital assets. According to current accounting standards, when the price of Bitcoin falls below the purchase cost, the company is required to reflect this loss in its financial statements.

Secondly, after the implementation of the new Financial Accounting Standards Board (FASB) standards, Strategy can recognize its unrealized gains on Bitcoin positions for the first time, but it also faces more complex tax issues. The company may need to pay Corporate Alternative Minimum Tax (CAMT) on these unrealized gains, which undoubtedly increases the financial pressure on the company.

In addition, as a component of the Nasdaq 100 index, Strategy must adhere to stricter information disclosure and corporate governance requirements, including stricter insider trading policies. The suspension of Bitcoin accumulation may be related to the lock-up period restrictions set by the company, especially around the time of financial report releases.

Despite Strategy pausing the purchase of Bitcoin, other institutions in the market have not followed this trend. On the contrary, several states in the U.S. are pushing to include Bitcoin as a state-level strategic asset. Currently, 16 states have submitted related bills, with two states making faster progress. If these bills are passed, it is expected that approximately 28,312 Bitcoins will be purchased for investment.

What is even more striking is that a Kentucky state representative recently introduced a bill suggesting that 10% of state funds be invested in digital assets with a market capitalization exceeding $750 billion. Based on Kentucky's state fund revenue for 2023, this means approximately $1.51 billion would flow into the Bitcoin market. If 16 states were to adopt similar measures, over $24 billion could flow into the Bitcoin market, equivalent to 1.25% of Bitcoin's current market capitalization or 3.24% of the value of the U.S. gold reserves.

This series of developments indicates that, although individual companies may adjust their strategies for their own reasons, Bitcoin's position in the global financial system is rising at an unprecedented pace. In the new political environment, the Bitcoin market is filled with uncertainty, but it also contains immense growth potential.