Why Strategy started selling Bitcoin and what it says about the crypto market

Strategy, the largest corporate Bitcoin holder led by Michael Saylor, has made its first significant sale of part of its cryptocurrency reserve in years. The company sold 3,588 BTC for approximately $216 million, making it one of the most widely discussed events in the crypto market in recent days.

The proceeds will be used to build a U.S. dollar reserve intended to fund dividend payments on STRC preferred shares and meet obligations to investors. Following the transaction, the company's cash reserves reached approximately $2.55 billion.

Why Strategy began selling Bitcoin

For years, Strategy pursued a policy of continuously accumulating Bitcoin, financing its purchases through the issuance of various securities. Michael Saylor repeatedly stated that the company had no intention of selling its Bitcoin holdings.

However, the prolonged downturn in the cryptocurrency market has significantly changed the company's financial position. During the second quarter, Strategy reported a loss of $8.32 billion, of which approximately $8.31 billion resulted from unrealized declines in the value of its cryptocurrency assets.

Pressure on Strategy intensified as market conditions deteriorated sharply. The total cryptocurrency market capitalization fell to approximately $2.2–2.3 trillion, while the market has lost roughly one-third of its value compared to last year. Another sign of growing investor caution was the outflow from spot Bitcoin ETFs: net outflows in June alone were estimated at around $4.06 billion, while over a 12-trading-day period they exceeded $3.5 billion.

Bitcoin's nearly 50% decline from its all-time high above $126,000, reached nine months ago, further weakened the company's financial performance and increased investor pressure.

According to the published data, the company sold:

• 1,361 BTC at an average price of approximately $59,256;
• 2,225 BTC at an average price of approximately $60,773.

After the sale, Strategy still holds 843,775 BTC. Since 2020, the company has acquired these coins for approximately $63.69 billion at an average purchase price of around $75,476 per Bitcoin. At current market prices, the reserve is valued at roughly $52 billion.

Why crypto investors closely watch Strategy

Strategy has long been viewed by the market as a proxy for Bitcoin. By purchasing the company's shares, many investors effectively gained exposure to the leading cryptocurrency through the stock market, while Strategy's shares often exhibited even greater volatility than Bitcoin itself.

That is why the decision to sell part of its reserve became a psychologically significant event. It called into question one of the core principles around which the company's investment story had been built for years.

Following the announcement, Bitcoin fell from approximately $62,900 to $61,600 within an hour, erasing nearly all of the gains accumulated over the weekend. Strategy shares (ticker: MSTR) also declined by around 4% in pre-market trading, while STRC preferred shares* continued trading below their $100 par value.

* Preferred shares are a special class of stock that typically gives investors priority in receiving dividend payments over common shareholders. For companies, preferred shares provide a way to raise capital without diluting control as much as issuing common shares, since they often carry limited or no voting rights. For investors, they resemble income-generating securities, with returns primarily coming from dividends rather than participation in corporate governance.

What problems still remain

According to analysts, selling part of its Bitcoin holdings only temporarily improves Strategy's liquidity situation and does not eliminate its underlying financial risks.

The company's main challenge is not a shortage of assets but the need to meet future financial obligations. According to Galaxy Digital estimates, Strategy will have to repay approximately $6.7 billion in convertible bonds during 2027–2028.

In addition, the company's ability to raise new capital largely depends on the price of its STRC preferred shares. Their par value is $100, and as long as the market price remains significantly below that level, issuing new shares becomes less attractive to investors. This limits Strategy's ability to continue financing Bitcoin purchases through its traditional approach.

Analysts believe the company's current actions are primarily aimed at "buying time" by building up U.S. dollar liquidity rather than addressing the business's long-term structural challenges.

Is there an alternative to selling Bitcoin?

Experts believe Strategy could generate cash flow without reducing its cryptocurrency reserves.

In particular, Galaxy Digital suggests using a small portion of the company's Bitcoin holdings for institutional lending or implementing options strategies* that generate additional income from market volatility.

* Options strategies are methods of generating returns or reducing risk using options — contracts that grant the right to buy or sell an asset at a predetermined price in the future. In Bitcoin's case, a company can use such strategies to profit from the market's high volatility, for example by earning option premiums in exchange for giving other market participants the right to buy or sell Bitcoin at a specified price.

Similar approaches are already being used by other major corporate Bitcoin holders. For example, Japanese investment company Metaplanet has reported generating tens of millions of dollars in additional income through such strategies. Comparable instruments are also employed by the U.S. company GameStop, the largest video game retailer, which has also begun building a Bitcoin reserve as part of its corporate strategy in recent years.

Although these approaches involve additional risks, they allow companies to generate recurring cash flow without the need to continually sell Bitcoin or issue more shares.

What this means for the market

The sale of 3,588 BTC by itself has little impact on Bitcoin's overall supply. However, the event carries far greater significance for market expectations.

Previously, Strategy was widely regarded as a company that accumulated Bitcoin under virtually all circumstances. The latest transaction has shown that, when necessary, part of its reserve can be used to solve financial challenges.

In the near term, investors will closely watch whether this sale remains a one-off measure to build a cash reserve or whether Strategy continues to gradually reduce its cryptocurrency holdings. The answer to this question could become one of the factors influencing both the company's share price and overall sentiment in the Bitcoin market.