CryptoQuant Warns Strategy to Pause Bitcoin Buys as Dividend Coverage Shrinks
Vexoda Newsroom
This week, CryptoQuant urged Strategy to pause its aggressive Bitcoin buying due to dwindling dividend coverage. Meanwhile, CBOE considers perpetual futures for crypto and Chainlink partners with bank
Crypto analytics firm CryptoQuant advised the investment strategy company 'Strategy' to temporarily halt its Bitcoin acquisitions amid a significant drop in dividend coverage from seven years down to just 14 months. This warning comes as Strategy faces increasing financial pressure due to large issuances of STRC preferred shares with an 11.5% yield, which have strained its cash reserves.
CEO Ki Young Ju highlighted that Strategy's annual dividend obligations surged to $1.2 billion following these share issuances, while the company’s cash reserve recovered only to about $1.4 billion after recent MSTR share sales. However, this still represents a 38% year-to-date decline in reserves due to repurchases of senior notes.
In other developments, CBOE is exploring the conversion of its continuous Bitcoin and Ether futures into perpetual contracts, aligning with regulatory changes that now allow such products. This move aims to provide traders with more flexible options similar to those popularized by BitMEX, potentially boosting liquidity in these markets as seen on DeFi exchanges.
Additionally, Zcash miner Fortitude Mining Holdings is set for an all-stock merger with HeartSciences, a medical technology company. The combined entity will be listed on Nasdaq under the ticker TUDE and aims to leverage HeartSciences' existing resources while integrating Fortitude’s mining expertise into healthcare solutions.
Furthermore, Chainlink has joined forces with European and Korean banking groups in Project Pangea, aimed at exploring stablecoin-based foreign exchange settlement. This collaboration seeks to create a cross-border payment network using blockchain technology, potentially revolutionizing international financial transactions through atomic swaps on the blockchain.
These developments underscore the evolving landscape of the crypto industry as companies adapt their strategies amidst changing market dynamics and regulatory pressures. Traders should monitor these trends closely for potential impacts on investment decisions and overall market stability.
Key players in this week’s Crypto Biz include Strategy, CBOE, Zcash miner Fortitude Mining Holdings, HeartSciences, Chainlink, FairSquareLab, the Unified Korea Alliance (UniKA), Qivalis, and Project Pangea.
Source: Cointelegraph. Summarized and rewritten by the Vexoda Newsroom. This is market news, not financial advice.