Strategy Cleared to Sell Up to $1.25B in Bitcoin to Cover Dividends

Bitcoin News

Strategy Inc. (Nasdaq: MSTR) has authorized the sale of up to $1.25 billion in Bitcoin (BTC) to fund dividend and debt obligations, according to an 8-K filing submitted to the SEC on June 29. The disclosure is part of a broader capital framework that also greenlights up to $1 billion in MSTR common-stock buybacks, up to $1 billion in STRC preferred-stock repurchases, and an expanded cash buffer of $2.55 billion. For a firm long defined by a strict Bitcoin-maximalist stance, the first-ever authorization to sell BTC drew the most attention. MSTR and STRC each surged more than 12% in after-hours trading. Coverage of the story is anchored on our Bitcoin desk.

Analysts framed the sale authorization as a de-risking move rather than a disorderly exit. The $1.25 billion cap represents roughly 2.5% of Strategy's 847,363 BTC treasury, and it functions as a ceiling rather than an immediate disposal. With daily Bitcoin spot turnover exceeding $60 billion, a sale of that size executed in isolation is unlikely to move the market. The more consequential signal, several desks noted, is structural: Strategy is no longer a passive accumulator but is now treating its Bitcoin as a managed capital resource. That shift adds balance-sheet resilience while departing from the pure hold-only thesis that originally defined the company.

The framework directly addresses roughly $1.76 billion in annual preferred-share obligations that had raised liquidity questions. Those concerns intensified after Strategy completed its first Bitcoin sale since 2022 last month, and after compression in its mNAV — the premium of market value over net asset value — fueled fears it could be forced into dilutive equity issuance or fire sales under stress. A pre-authorized, orderly monetization mechanism is structurally healthier than reactive selling from a weak position. With Bitcoin trading near $59,500, its lowest level since October 2024, the company is opting to manage its balance sheet from a position of planning rather than pressure.

Central to the new structure is STRC, a perpetual preferred instrument that sits between conventional equity and debt-like tooling. Strategy describes STRC as perpetual preferred stock carrying an approximately 12% annualized dividend on a $100 par value, funded from cash reserves and its Bitcoin-linked capital framework. Following the announcement, STRC recovered from $72.06 on June 26 to $84.86. The expanded $2.55 billion cash buffer is earmarked to service dividends and debt before any repurchase or coin sale is triggered. The disclosed operating sequence — buffer first, then buybacks, then BTC sales only if necessary — moves investor expectations from vague to quantified, a meaningful step up in transparency.

Skeptics remain unconvinced that the framework removes the core risk. Critics have long argued that Strategy's raise-and-accumulate model is inherently reflexive: the flywheel that amplifies gains in a bull run can accelerate losses in a bear market. One prominent investor compared the setup to the 2022 collapse of Terra/LUNA, an episode tied to algorithmic stablecoins, warning that feedback loops intensify when leverage and sentiment sour together. Others contend that financial engineering does not create long-term value, while Bitcoin critic Peter Schiff argued that Strategy merely pausing purchases — let alone selling — is enough to weigh on the market.

A more constructive stress test circulated among Strategy supporters offered a counterweight. The three-year model assumed Bitcoin falling 55%, capital markets shut, and cash steadily depleting. Under those conditions, the analysis projected Strategy selling roughly 116,000 BTC over the period while still retaining more than 700,000 BTC — surviving the cycle intact. Neutral observers added that the real early-warning signals would appear in funding conditions first: widening discounts, rising yields, and shrinking issuance capacity, rather than Bitcoin's spot price alone. On that reading, the framework's four hard parameters strengthen Strategy's ability to manage short-term stress without eliminating its underlying dependence on capital markets.

Our reading of COINOTAG's proprietary 42-indicator composite S/R scoring engine puts Bitcoin at $59,209.89 as of writing, down 0.77% on the day. The engine rates the $60,264 resistance at 69/100 (STRONG), driven by the confluence of R2, the prior-day high and the Ichimoku Tenkan line, while the $57,782 support scores 76/100 (STRONG) on Keltner Lower, Donchian Lower and the lower Bollinger Band. RSI at 32.71 with a bearish MACD confirms the downtrend. Derivatives data show a 0.0034% funding rate, $12.08 billion in open interest and a stretched 2.39 long/short ratio (70.5% long) — crowded longs into a Fear & Greed reading of 11 (Extreme Fear). A daily close below $57,782 would invalidate the bullish bounce thesis and open the $50,987 zone.