Saylor's Bitcoin Lemonade Stand: Strategy Sells 3,588 BTC to Pay the Bills 🍋

Strategy, the largest publicly traded corporate holder of Bitcoin, sold 3,588 BTC for approximately $216 million over the past week to fund dividends on its preferred shares and maintain its U.S. dollar reserves, according to a Monday disclosure and a Form 8-K filing with the U.S. Securities and Exchange Commission. The Michael Saylor-led firm executed the sales in two tranches: 1,363 BTC at an average price of $59,256 between June 29 and June 30, generating $80.8 million, and 2,225 BTC at an average price of $60,773 between July 1 and July 5, generating $135.2 million. Following the transactions, Strategy's holdings decreased to 843,775 BTC, carried at a total cost basis of $63.7 billion, or approximately $75,476 per coin, while its USD Reserve remained at $2.55 billion as of July 5.

The sale represented the first execution of Strategy's Digital Credit Capital Framework, introduced in a June 29 Form 8-K filing. The framework authorizes the company to raise up to $1.25 billion by selling Bitcoin to fund cash reserves, preferred stock dividends, interest expenses, and repurchases of preferred securities and Class A common stock, while preserving long-term Bitcoin exposure. As of July 5, the BTC Monetization Program disclosed on June 29 remained fully available. Concurrently, Strategy increased the annual dividend rate on its Stretch (STRC) perpetual preferred stock to 12% and authorized $2 billion in stock buybacks. STRC traded at $88.70, or 11.3% below its $100 intended par value, during Monday's pre-market session, according to Yahoo Finance data.

Strategy recorded an unrealized loss of $8.32 billion on its digital assets in the second quarter as Bitcoin traded near $60,000, well below its average acquisition price. The company also reported a realized loss of $0.9 million tied to the recent sales. In early June, Strategy had sold 32 BTC for approximately $2.47 million at an average price of $77,135, marking its first reported Bitcoin sale since a 2022 tax-loss transaction in which it sold 704 BTC at roughly $16,500 per coin. Following its current sales, Strategy retains sufficient resources to cover 26 months of dividend costs if it also draws on its Bitcoin holdings, with Bernstein analysts estimating 17 months of cash coverage for dividend obligations and interest payments.

Following the announcement, Bitcoin dropped 2.4% to around $61,800 before rebounding above $64,200 in overnight trading, reaching $64,400 in late trading on Monday. Grayscale Research head Zach Pandl said the move should "restore market confidence" in Strategy's financing structure and may help Bitcoin's price "find a more durable bottom" by relieving pressure from further BTC sales. Andri Fauzan Adziima, research lead at Bitrue Research Institute, described the sale as a "smart, stabilizing move that actually strengthens the setup for Bitcoin." Bernstein maintained its $150,000 year-end Bitcoin price target, while Saylor, in posts on X on Sunday and Monday, referred to Bitcoin as "Digital Energy" and predicted that changes in Bitcoin's codebase will be less impactful on the digital asset's evolution than deepening capital markets and an expansion of digital credit.