Strategy is redefining its business model. The world's largest corporate holder of Bitcoin disclosed on July 6th that it sold 3,588 Bitcoin between June 29th and July 5th, raising approximately $216 million to fund dividends for its series of preferred shares. This represents not only the largest Bitcoin sale in the company's history but also its third such sale since initiating its Bitcoin strategy in 2020.
This sale sends a significant signal: Bitcoin is transitioning from being a "buy-and-hold" strategic reserve for Strategy into an asset that can be utilized for liquidity management.
According to reports, the company recently expanded its authorization to sell Bitcoin to bolster liquidity when the attractiveness of new equity financing diminishes. This adjustment comes as both Bitcoin and Strategy's stock price face downward pressure. Over the past year, MSTR has declined by approximately 75%, while Bitcoin has retreated more than 45% from its all-time high.
Following the announcement, Strategy's stock price fell over 5% intraday, and Bitcoin dropped to around $61,800, which is below the company's average holding cost of roughly $75,700.
Shift from "Never Sell" Policy
Strategy long considered a policy of "never selling Bitcoin" as foundational to its business model, but this commitment is now showing clear signs of flexibility.
In late May, the company broke precedent for the first time by selling 32 Bitcoin for about $2.5 million to cover preferred share dividends. At that time, the company emphasized the move was solely to fulfill commitments to preferred shareholders and did not indicate a strategic shift.
However, the latest sale is dramatically larger at 3,588 Bitcoin, roughly one hundred times the May volume. The company disclosed that 1,363 of these were sold at an average price of approximately $59,300, with the remaining 2,225 sold at around $60,800. This indicates that selling Bitcoin is no longer a one-off symbolic action but is gradually being integrated into the company's regular financing framework.
Pressure from $1.5 Billion Annual Dividend and Liquidity Strain
The proceeds from this sale are earmarked specifically for paying second-quarter dividends on four series of preferred securities—STRF, STRE, STRK, and STRD—as well as the June monthly dividend for STRC. Analyst Zach Pandl noted that Strategy's annual preferred share dividend obligations alone amount to approximately $1.5 billion, far exceeding the cash flow generated by its software business. When cash reserves are insufficient, the company must either seek additional financing or sell Bitcoin.
As of July 5th, Strategy holds 843,775 Bitcoin and has cash reserves of $2.55 billion, with an average holding cost of about $75,700. Although after its first sale in late May, the company quickly purchased an additional 1,550 Bitcoin, and had executed large-scale purchases of $2.54 billion and $2.0 billion in April and May respectively, this latest sale does not signal a halt to accumulation. Instead, it represents a flexible adjustment within the system.
Strategy's operational logic is becoming clearer: continue buying Bitcoin when financing is readily available, and sell a portion of holdings to cover dividends when financing tightens, thereby maintaining the closed loop of its capital operation system. According to reports, the company recognized an $8.32 billion digital asset impairment in the second quarter, coinciding with a 14% drop in Bitcoin's price during the period, further intensifying pressure on its cash flow management.
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