Strategy Sells $216M in Bitcoin, Lifting Dividend Cover to 17 Months

Bitcoin News

Grayscale Research has framed Strategy's US$216 million Bitcoin (BTC) sale as a stabilizing move rather than a bearish signal, arguing it lowers the company's near-term funding risk. Zach Pandl, the firm's head of research, said the disposal helps Bitcoin find a more durable bottom by easing pressure for further forced selling from Michael Saylor's treasury vehicle. The proceeds lifted Strategy's dollar reserves to roughly US$2.55 billion, enough to cover about 17 months of preferred-stock dividends. Grayscale said the rebound in the STRC instrument shows investors responded positively to the decision, restoring confidence in the financing structure.

The company's regulatory filing (SEC EDGAR) confirms it offloaded 3,588 BTC across two tranches between June 29 and July 5. Strategy sold 1,363 BTC at an average price near US$59,256 for about US$80.8 million, then a further 2,225 BTC at roughly US$60,773 for around US$135.2 million. The sales fall under a new liquidity program that permits disposing of up to US$1.25 billion in Bitcoin to build reserves, fund dividends and interest, or support buybacks. Proceeds were earmarked for dividends on the STRF, STRE, STRK, STRD and STRC preferred series, whose combined annual payout obligation runs near US$1.2 billion.

Investor attention centered on STRC, a floating-rate preferred share carrying a yield close to 12 percent that had recently traded well below its US$100 face value on doubts about dividend sustainability. Following the sale, STRC topped US$91 for the first time in three weeks, a recovery Grayscale cited as evidence its balance-sheet strategy is working. Analysts read the bounce as a sign that the market now views the instrument as better supported. The rebound mattered because a weak STRC price had signaled rising dividend pressure on the treasury model and raised fresh questions about how Strategy would juggle competing obligations.

Strategy's cash position had thinned to about US$870 million by late May, leaving roughly six months of dividend coverage and prompting concern over its next step. In late June the company introduced a capital-management framework under which it would issue shares and sell Bitcoin whenever necessary to keep dollar reserves sufficient for dividend obligations. The July sale was the first sizable execution under that policy. Pandl argued there is nothing structurally wrong with the balance sheet, noting the company clearly holds the resources to service both debt and dividends, but that shifting market conditions had created uncertainty about how it would balance priorities.

By the firm's own investor disclosures, Strategy holds roughly US$52 billion in Bitcoin against about US$7 billion in debt, with annual preferred-equity dividend obligations below US$2 billion. Even after the latest sale the company retains 843,775 BTC — more than 4 percent of Bitcoin's fixed 21 million supply — at an average cost near US$74,476 per coin. At prevailing prices that leaves an unrealized paper loss of around US$11.4 billion. Pandl had earlier urged Strategy to sell at least US$3 billion in Bitcoin to cover most of its cash liabilities over the coming two years, a larger disposal than the one just executed.

Not every observer shared the optimism. Economist Peter Schiff warned that Strategy's remaining stack could generate far steeper losses if Bitcoin's decline deepens toward a broader bear market. The initial reaction to the disclosure was negative, with Bitcoin briefly sliding to a session low near US$61,246 before recovering above US$64,000 within hours. That quick bounce suggested investor concern was short-lived, yet the episode underscored how sensitive prices remain to treasury activity from the largest corporate holder. With Bitcoin still trading far below its all-time high, the balance between forced-selling fears and renewed confidence stays delicate across the wider altcoin market.

Our reading of the tape, as of the latest print near US$63,054, leans on COINOTAG's proprietary 42-indicator composite S/R scoring engine, which rates the US$63,799 resistance at 81/100 — the strongest overhead level — on a confluence of the Fibonacci 0.236 retracement, a high-volume node and the prior daily close, with the US$67,024 band behind it at 76/100 from the Keltner Upper and Ichimoku cloud top. On the downside, the engine scores US$61,927 support at 71/100, anchored by the 20-period SMA and Bollinger midline. Derivatives data shows a modestly positive 0.0034 percent funding rate, US$12.3 billion in open interest and a 1.72 long/short ratio, so leveraged longs still dominate. With a neutral 50.25 RSI and a Fear & Greed reading of 27, a decisive break below US$61,927 would invalidate the constructive case, while reclaiming US$63,799 opens room toward US$67,024.