Strategy Sells 3,588 Bitcoin at a Loss to Fund Preferred Dividends

Bitcoin News

Strategy, the largest corporate holder of Bitcoin (BTC), sold 3,588 BTC over the past week for roughly $216 million, marking a historic reversal for a firm long defined by its buy-and-hold conviction. A Form 8-K filing lodged with the SEC on July 6 confirms the disposals occurred between June 29 and July 5, with proceeds earmarked to cover preferred-stock dividends and refill the company’s dollar reserve. The average sale price landed near $60,773 per coin, far below the firm’s $75,476 cost basis. For a company that spent years accumulating Bitcoin, the filing crystallizes a turn from one-way stacking to active balance-sheet management under liquidity pressure.

The sale is the first execution of the BTC Monetization Program that Strategy unveiled on June 29 as part of its Digital Credit Capital Framework. The mechanism authorizes the firm to raise up to $1.25 billion by liquidating Bitcoin when cash is needed for dividends, interest, buybacks and reserve funding. Executive Chairman Michael Saylor disclosed on X that the company now holds 843,775 BTC in its treasury and $2.55 billion in USD reserves as of July 5. The $216 million monetized represents about 17% of the program’s total headroom, leaving substantial capacity available should preferred obligations tighten further in the quarters ahead.

The proceeds service dividends across Strategy’s Digital Credit family of perpetual preferred shares: STRC, STRK, STRD, STRF and STRE. The company confirmed the funds cover second-quarter distributions on four series and fully settled the June monthly payout on STRC, whose annual dividend rate was recently lifted to 12%. The June 29 framework also authorized up to $1 billion in repurchases of Digital Credit securities, with STRC prioritized after the series traded at a notable discount. Together, the rate hike, the reserve floor and the buyback authorization form a coordinated credit-management toolkit aimed at reassuring both shareholders and preferred holders.

Measured against the company’s enormous stack, the disposal is small: 3,588 coins equal roughly 0.42% of the 843,775 BTC still held. Yet the symbolism outweighs the balance-sheet impact. This is only the third time Strategy has sold Bitcoin since 2022, and the first ever justified explicitly by dividend obligations. The prior sale, in late May, moved just 32 BTC at an average near $77,135 for about $2.5 million. The latest transaction is more than 100 times larger by dollar value and executed at a markedly lower price, underscoring how much the market environment deteriorated between late May and early July.

The financial toll surfaced sharply in the quarterly figures. Strategy booked an $8.32 billion loss on digital assets for the second quarter, almost entirely unrealized, as Bitcoin’s cost basis of $63.7 billion outstripped fair value. The carrying value of its digital assets fell to about $49.67 billion, forcing a full valuation allowance against the related deferred tax asset. Notably, the company issued no common stock through its at-the-market program during the period and executed no buybacks, meaning it avoided diluting shareholders even as it turned to its Bitcoin reserve to raise the cash needed for the preferred payouts.

The disclosure also flagged a leadership change at the top of Strategy’s finance function. The filing states that Vice President and Chief Accounting Officer Jeanine Montgomery retired effective June 30. The board appointed Andrew Kang, the current Executive Vice President and Chief Financial Officer, to additionally serve as Principal Accounting Officer from the same date. The reshuffle consolidates accounting oversight under the CFO as the treasury company navigates a period of acute financial strain, with $2.55 billion in cash offering a temporary buffer against near-term preferred-dividend and debt obligations.

Our reading of the tape places spot Bitcoin near $61,858 as of publication, down 1.39% on the day and pinned inside a fragile band. COINOTAG’s proprietary 42-indicator composite scoring engine rates the $63,961 resistance at 64/100, driven by the confluence of a high-volume node, the prior-day high and a bearish engulfing signal, while $59,154 support scores 73/100 on S3, Fibonacci and Donchian-lower confluence. Derivatives read cautiously constructive: the perpetual funding rate sits at a mild 0.0049% and the long/short account ratio at 1.81 (64.5% long), yet a Fear & Greed reading of 24 signals Extreme Fear. A reclaim of $62,508 opens the door higher; a decisive break below $59,154 invalidates the bullish thesis.