Strategy (MSTR) won’t be forced to sell Bitcoin to stay afloat if its share price drops, and those who say otherwise are “just flat wrong,” says Bitwise chief investment officer Matt Hougan.

“There is nothing about MSTR’s price dropping below NAV [net asset value] that will force it to sell,” Hougan argued in a note on Tuesday, pointing to chairman Michael Saylor’s steadfast conviction in Bitcoin 

BTC$92,316.

“It would indeed be very bad for the Bitcoin market if MSTR had to sell its $60 billion of Bitcoin in one go — that’s akin to two years of Bitcoin ETF inflows,” Hougan said. “But with no debt due until 2027 and enough cash to cover interest payments for the foreseeable future, I just don’t see it happening.”

Fears that Strategy could sell its massive Bitcoin haul flared after the company’s CEO, Phong Le, said last week that it could offload some of its stash as a “last resort” if Strategy’s market value slipped below the value of its Bitcoin holdings.

If that happened, and Strategy’s financing options dried up, Le said it would be justifiable to offload some Bitcoin to protect the firm’s “Bitcoin yield per share.”

Strategy is also facing a lengthy crypto market slump, along with a potential delisting from the MSCI stock market index.

Strategy can weather the storm, Hougan says

Hougan said that Strategy’s situation is not dire enough to start selling Bitcoin, as the cryptocurrency trading around $92,000 is “24% above the average price at which Strategy acquired its stash ($74,436).”

He added the company has a lot of leeway even if its stock drops below its NAV, as Strategy’s books show no near-term pressure that would force it to sell Bitcoin. 

“MSTR has two relevant obligations on its debt: It needs to pay about $800 million a year in interest and it needs to convert or roll over specific debt instruments as they come due,” he said. 

“The interest payments are not a near-term concern. The company has $1.4 billion in cash, meaning it can make its dividend payments easily for a year and a half,” he added. 

Over the past 30 days, MSTR has declined 24.69%, ending trading on Friday at $186.01.

Part of that downward pressure on the price may be a result of the announcement in October from Morgan Stanley Capital International, which stated that it may exclude from its indices digital asset treasury companies that have balance sheets with more than 50% crypto assets. 

Such a move would force index-tracking funds to sell, putting even more pressure on MSTR. 

Hougan doesn’t believe that will ultimately have a significant impact on sentiment toward Strategy or its share price, arguing that historically, such occurrences have been less impactful than expected.  

“My experience from watching index additions and deletions over the years is that the effect is typically smaller than you think and priced in well ahead of time,” he said. “When MSTR was added to the Nasdaq-100 Index last December, funds tracking the index had to buy $2.1 billion of the stock. Its price barely moved.”