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Saylor Announces Bitcoin “Monetization” Program
In a move to stop bleeding in STRC, Strategy yesterday announced a new capital framework relating to how the company manages liquidity and its vast Bitcoin holdings. This is important stuff, so don’t snooze past this article.
The new framework includes five components. Let’s go through each carefully:
● A formal USD reserve policy whereby the company promises to hold a 12 month USD minimum for dividend payments. Currently, Strategy’s USD reserve sits at $2.55B, which provides 17.4 months of dividend coverage.
● An STRC dividend increase from 11.5% to 12%.
● Up to $1B in STRC and other credit security repurchases, funded via possible BTC sales (not from the USD reserve).
● Up to $1B in MSTR repurchases, funded via possible BTC sales (not from the USD reserve).
● A new BTC monetization program, which authorizes the company to sell Bitcoin for the purposes of achieving 1 - 4 above.
Let’s step back and discuss what’s really happening here. Saylor built a flywheel, whereby he sold MSTR and STRC and used the proceeds to buy Bitcoin. The Bitcoin purchases increased the price of Bitcoin, which gave investors more confidence to buy MSTR and STRC. Rinse and repeat.  But now that flywheel is going in reverse. Bitcoin is in a bear market, which is spooking MSTR and STRC holders, which means capital is fleeing away from these assets. When MSTR and STRC are bleeding, Saylor can’t buy more Bitcoin, which means one of Bitcoin’s strongest price buoys isn't working. Rinse and repeat.
So to stop this unwind, Saylor is authorizing possible Bitcoin sales, for the ultimate purpose of supporting his MSTR and STRC products.
No hopium, but I think this monetization program is a logical and positive development for the company. There’s no free lunch in markets, and that means Strategy cannot leverage its Bitcoin holdings forever. This monetization program acknowledges this reality, and it should give MSTR and STRC investors much more confidence in these products.
Moreover, any near-term BTC sales from Strategy would likely be a drop in the bucket ($2B max) compared to what the company has purchased, especially given the USD reserve is full, and the bear market is close to over.
CLARITY’s Do or Die Window is July
Here’s a quick update on where things currently stand with the US CLARITY Act. As you probably know, passage of this act is positive for the crypto markets because the legislation provides clear rules of the road and reduces legal uncertainty for companies and investors in relation to digital assets.
So here’s where we’re at, and what we’re looking at for July.  CLARITY advanced through the Senate Banking Committee in May and passed via a House floor vote on June 17th. The bill is now eligible for a final Senate floor vote, which is the last major hurdle before President Trump can sign it.
Negotiations are ongoing amongst senators on a few remaining issues, the primary of which are ethics provisions related to elected officials’ crypto holdings (i.e. think Trump and his bags).
Senators John Thune, Tim Scott, and Cynthia Lummis are aiming for a Senate floor vote in July, but if the vote doesn’t happen by August recess, then the chances of CLARITY becoming law drop significantly. And that’s because mid-term elections occur this fall, so if the power shifts to the Democrats, then we can kiss CLARITY goodbye. Basically, it’s do or die for CLARITY in July.
This Week’s Key Economic Events & Data
Last week, we got core PCE showing continual elevated and sticky inflation, along with GDP numbers indicating that the economy is relatively strong. Looking forward, we’ve got a busy economic release week, with most measures covering US employment.
Here’s what to watch for this week:  ● JOLTS Job Openings for May (Today, 10:00 am ET): Measures the number of job openings across the US economy. A sharp drop in openings signals cooling labor demand, which gives the Fed more room to cut rates. The previous print was 7.6M. Forecast consensus is 7.2M.
● ADP Nonfarm Employment Change for June (Tomorrow, 8:15 am ET): Provides an early read on private-sector job growth ahead of the official jobs report. Stronger-than-expected numbers suggest labor market resilience, which reduces the odds of a cut. Previous was +122K. Forecast is +118K.
● ISM Manufacturing PMI for June (Tomorrow, 10:00 am ET): Key manufacturing sector gauge. Readings above 50 indicate expansion, signalling strong economic activity, which reduces the need for a cut. Previous was 54.0. Forecast is 53.8.
● Nonfarm Payrolls for June (Thursday, 8:30 am ET): Headline jobs number and one of the most important releases for the Fed. Strong job growth lessens the need for a cut. Previous was +172K. Forecast is +114K.
● Unemployment Rate for June (Thursday, 8:30 am ET): Measures the percentage of the labor force that’s unemployed. A rising unemployment rate means the labor market is weakening, which increases the chance of a rate cut. Previous was 4.3%. Forecast is 4.3%.
These releases will be closely watched as the market continues to decipher how Kevin Warsh views the balance between inflation and employment. Inflation is stubbornly high with the overall economy relatively strong, so if the labor market shows strength, it helps seal the deal for no cuts this year, under the Fed’s traditional framework.
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