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MicroStrategy’s radical new strategy: bitcoin slide forces earnings reset and $1.4 billion cash-reserve play MicroStrategy Inc.—branded simply “Strategy” in recent corporate communications—has ripped up its 2025 financial strategy after bitcoin’s sharp retreat below $90,000. The Tysons Corner, VA software-turned-crypto-treasury company on Monday slashed its full-year outlook from a projected $24 billion profit to a swing range of +$6.3 billion to –$5.5 billion and unveiled a USD-denominated reserve fund of $1.44 billion to secure dividend and debt payments. Sub-headline keywords: Strategy earnings forecast • bitcoin strategy • corporate cash-reserve strategy Why the reserve strategy matters • Stabilises payouts: Two years of preferred-stock dividends are now pre-funded, insulating investors from crypto volatility. • Signals disciplined capital strategy: Management is pivoting from an “all-bitcoin” treasury strategy to a blended cash-and-crypto model. • Sets a precedent: Other crypto-heavy balance sheets may replicate the reserve strategy if bitcoin price pressure persists. Market reaction to the new strategy Shares of Strategy tumbled 8 % intraday as traders recalibrated risk models; yet options data show growing open interest in January calls around $250, hinting at tactical dip-buying. Analysts at IG Group warn the company’s strategy remains “at the mercy of macro crypto sentiment,” while Benchmark’s Mark Palmer calls the cash buffer “a prudent short-term strategy to buy time.” Bitcoin strategy outlook • Holdings: 650,000 BTC—over 3 % of total supply—remain core to the long-term strategy. • Breakeven: Management’s implied breakeven is ≈ $138,000 per BTC; every $10,000 move shifts annual EPS by ~$1.2 billion. • Next move: Strategy says it “may opportunistically deploy” part of its reserve into additional bitcoin if prices “reach strategic support zones in the $70,000s.” What’s next for investors 1. Watch December Fed signals: Lower rates could revive the risk-on strategy narrative. 2. Monitor hash-rate trends: Higher mining costs historically precede bitcoin supply squeezes that benefit Strategy’s accumulation strategy. 3. Track quarterly reserve disclosures: Transparency will determine whether the market rewards the new cash-first strategy. Bottom line MicroStrategy’s pivot underscores a broader shift from a single-asset bet to a layered risk-management strategy. Whether the strategy succeeds now hinges on bitcoin’s trajectory and the firm’s discipline in balancing digital-asset conviction with a conventional cash-reserve strategy.