Key Takeaways
- Peter Schiff said the bitcoin sale marks a risky shift in Strategy’s model that could increase realized losses if more BTC is sold.
- Strategy sold 3,588 bitcoin for about $216 million, raising concerns about further selling pressure.
- Analysts said the policy could increase crypto market volatility.
How Strategy’s Confirmed Bitcoin Sale Turned Into a Market Signal
Strategy Inc. (Nasdaq: MSTR) sold 3,588 bitcoin, raising about $216.3 million, the company announced on July 6. It said proceeds funded preferred dividends and reserve needs under its BTC Monetization Program.
After the sale, Strategy held 843,775 BTC with an aggregate purchase price of about $59.08 billion. As of this writing, BTC trades near $63,478, below Strategy’s average purchase price of about $75,476.
“MSTR spent the last two weeks selling bitcoin. The average price on 3,588 bitcoin sold was $60,196.73,” economist and gold advocate Peter Schiff wrote on X July 6, adding:
“Given MSTR’s average cost, that’s a realized loss of about $15K per bitcoin, or about $54 million. With over 840K bitcoin left to sell, the total losses will be much greater.”
Strategy’s Bitcoin Monetization Program is a capital management plan that allows, but does not require, the company to sell bitcoin to raise cash for reserves, dividends, debt reduction, share buybacks, and other corporate purposes.
Why Schiff Says Saylor’s Treasury Model Now Cuts Both Ways
Schiff argued that Strategy has shifted from raising capital to accumulate bitcoin to selling it to cover obligations. According to Schiff, the framework could allow up to $3.25 billion in bitcoin sales, including $1.25 billion for reserves and $2 billion for buybacks.
“MSTR now has a completely different business model,” the gold advocate wrote:
“Instead of selling common and preferred stock and issuing debt to buy bitcoin, the new strategy is to sell bitcoin to pay interest and dividends, pay off debt, buy back shares it sold, and hope that bitcoin’s price goes way up.”
What Analysts Are Watching Before Strategy’s Next Move
Coin Bureau CEO Nic Puckrin said Strategy is in “a very difficult position” due to STRC dividend obligations. He does not expect forced liquidations, but warned even small sales could hurt sentiment if bitcoin stays weak.
Strategy’s cash reserve covers about 17 months of dividends, while analysts have suggested 24 to 36 months for stability. Michael Saylor defended the policy as liquidity management, citing $2.55 billion in USD reserves and $1.25 billion in monetization capacity, or 25.9 months of coverage.
Not all analysts view the policy negatively. Bitfinex analysts explained Strategy’s authorization to sell up to $1.25 billion in bitcoin could reduce forced-selling risk by adding liquidity during stress. Future filings will show whether Strategy sells more bitcoin, raises capital, or resumes accumulation.
Zach Pandl, head of research at crypto asset manager Grayscale, wrote on X on July 6 after Saylor announced Strategy’s 3,588 BTC sale:
“In my view, BTC sales by Strategy are needed to restore confidence in STRC and its structure in general. I am encouraged to see they executed some sales last week. Further reduces short-term tail risks for bitcoin. I would expect STRC to continue to trade well.”