Strategy Authorizes Up to $1.25B in Bitcoin Sales Under New Capital Framework

Bitcoin News

Strategy, the largest corporate holder of Bitcoin (BTC), has authorized its first formal program to sell part of its bitcoin treasury, according to a Form 8-K filed with the SEC on Monday. The new Digital Credit Capital Framework permits the company to monetize up to $1.25 billion in Bitcoin to strengthen liquidity, fund preferred stock dividends, and finance share buybacks. The filing sets no fixed cap on total sales but ties monetization to specific board-approved purposes, and anything beyond those would require fresh board approval. Management stressed it is not obligated to sell any bitcoin and will do so only when it judges sales more advantageous than issuing common stock or pursuing other financing.

A central pillar of the framework is Strategy's dedicated USD Reserve, which the company disclosed has been rebuilt to $2.55 billion — enough to cover roughly 17 months of preferred stock dividends and interest payments. Under the new policy, the reserve may be used only for those obligations and must be maintained at a minimum of 12 months of coverage unless the board approves otherwise. The buffer had drawn scrutiny earlier this year after thinning to around 14 months, prompting analysts to call for fresh cash. At the start of 2026 the firm had set aside a comparable sum to manage its dividend and debt-servicing commitments.

The plan also reshapes Strategy's payout and repurchase mechanics. The annual dividend rate on its STRC perpetual preferred stock — a yield-bearing instrument marketed as Stretch — was lifted to 12% from 11.5%. Alongside it, the board authorized two open-ended buyback programs: up to $1 billion for repurchasing Digital Credit Securities and up to $1 billion for Class A MSTR common stock, neither carrying an expiration date. Proceeds from any bitcoin sales may fund those repurchases when management deems them accretive. Saylor framed the changes as a move to strengthen credit quality and to reduce expected preferred dividend payments when conditions allow.

Executive chairman Michael Saylor said the existing reserve combined with the newly authorized monetization capacity gives Strategy about $3.8 billion in dividend coverage, equivalent to nearly 26 months. He added that the company intends to remain disciplined in issuing new MSTR shares, particularly when the stock trades at or near one times its modified net asset value, or mNAV — the metric tracking share price against the market value of its bitcoin holdings. The emphasis signals a pivot from aggressive equity issuance toward active capital management, a notable shift for a firm that built its treasury through relentless stock- and debt-funded buying.

The framework lands during a punishing stretch for Strategy's securities and a broader bear market in its instruments. MSTR shares have slid almost 50% year-to-date, while STRC traded as low as $71.25 on Friday, a 28.75% discount to par, underscoring doubts about the firm's funding model. The pressure has fueled debate over how the company will meet recurring obligations without diluting shareholders further. Grayscale research head Zach Pandl argued last week that Strategy should sell roughly $3 billion in bitcoin to restore investor confidence — a figure well above the $1.25 billion now authorized, hinting the disclosed capacity may be a floor rather than a ceiling.

Notably, Strategy reported no new bitcoin acquisitions during the week ended Sunday, leaving its holdings unchanged at 847,363 BTC bought for a combined $64.1 billion, an average price of $75,651 per coin — a level that sits above current spot and far from the euphoria of bitcoin's last all-time high. The pause marks a departure from the near-weekly accumulation that defined its approach through prior cycles. The company did, however, raise about $1.15 billion in fresh capital over the period. MSTR shares responded positively, climbing more than 5% in pre-market trading to around $86.52 before the Nasdaq open as investors read the liquidity provisions as stabilizing.

Our reading of COINOTAG's proprietary 42-indicator composite S/R scoring engine places bitcoin near $59,566, down about 1% on the day and locked in a confirmed downtrend. The engine rates the $58,958 support at 82/100, driven by the confluence of the S1 pivot and the prior-day low, while the $60,961 resistance scores 80/100 on R1 and a Fibonacci 0.114 cluster. An RSI of 33 and a bearish MACD reinforce the weak posture. Derivatives data shows a positive 0.0053% funding rate, $11.7 billion in open interest and a long/short ratio of 2.46 — 71% long, a crowded book vulnerable to a squeeze. With the Fear & Greed Index at 12 (Extreme Fear) and BTC dominance at 70.1% as capital concentrates over altcoins, a daily close below $58,958 would invalidate the bullish case.