Strategy may sell bitcoin worth up to $1.25 billion to create a liquidity reserve, while simultaneously launching a share buyback. For Michael Saylor’s company, this is a notable shift: previously, it only increased its crypto reserves, but now it is considering selling part of its tokens amid the market downturn.
On Monday, shares of Strategy, the largest public corporate holder of bitcoin, rose more than 12% and climbed to $93.42. The increase was the first after eight consecutive sessions of decline. Two pieces of news triggered the rally: the company approved buyback programs and announced it may sell part of its bitcoin reserves to strengthen its balance sheet.
What Strategy Decided
Strategy approved two buyback programs:
- Common shares: up to $1 billion.
- Preferred shares: up to $1 billion.
The company also indicated that it will now be more cautious in issuing common shares, especially if the market values it nearly at the level of its bitcoin holdings.
“We intend to alternate between issuing securities when raising capital looks attractive and buying back securities when our instruments trade at levels where buybacks increase value for shareholders,” said Strategy CEO Phong Le.
To strengthen its cash position, Strategy allowed for the sale of only part of its bitcoin reserves—up to $1.25 billion.
Key reserve parameters currently look like this:
- Total portfolio: about 847,363 bitcoins.
- Reserve valuation: approximately $50.4 billion at Sunday's price.
- Potential sale: up to $1.25 billion, or about 2.5% of the portfolio, or roughly 21,000 bitcoins at the same valuation.
Information about the current portfolio can be checked in official Strategy sources: on the company website, in financial statements, and in public statements by management.
The volume and timing of a possible sale will depend on market liquidity, the price of bitcoin, the company's need for cash reserves, and how advantageous the buyback proves to be. The limitation for Strategy is the very purpose of the deal: the sale is not to abandon bitcoin, but to support the balance sheet and obligations to investors.
Bitcoin remains the main asset on Strategy's balance sheet, so any possible sale is seen by the market as an important signal. Until now, the company's business model was built around the constant accumulation of cryptocurrency: Strategy issued securities, raised capital, and directed funds to new purchases. If such a large holder enters the market with a sale, it could increase pressure on the price of bitcoin, raise volatility, and prompt other major holders to reconsider their positions more carefully.
How Bitcoin Is Converted to Cash
In practice, bitcoin is usually sold in three ways: through a crypto exchange, through an OTC deal with a large counterparty, or via a P2P platform. After the deal, the buyer receives the bitcoins, and the seller receives fiat currency, such as dollars, which is then withdrawn to a bank account or left in a corporate account for payments and reserves.
Why Investors Reacted This Way
The key trigger was the mNAV indicator. It compares the value of Strategy, including debt and preferred shares, to the value of its bitcoin reserves. Previously, this multiplier supported an optimistic view of the company, but on Friday it fell below parity for the first time.
According to Strategy, at the close of the previous session, mNAV was 0.99. This means the market valued the company below the value of its bitcoins, taking into account its capital structure. By Monday, the indicator had risen to 1.05.
At the close of previous trading, Strategy's market capitalization was $29.54 billion. At the same time, the value of the bitcoins on its balance sheet was significantly higher. This gap raised questions about the model that for many years allowed Michael Saylor to use expensive shares and other financing instruments to expand the crypto position.
Over the month, Strategy's shares lost 44.5%, and over the year they fell by almost 80%. For the market, this became a test of the entire structure: if the share price falls too deeply, issuing new shares ceases to be a convenient source of capital, and investors begin to scrutinize debt, preferred instruments, and future obligations more closely.
What Matters in the Capital Structure
Investors monitor several elements at once:
- Strategy common shares.
- Preferred instruments, including STRC.
- Dividends on preferred shares.
- Debt burden.
- Market perception of risk.
If a company raises money through different securities, the entire structure is important for evaluation: shares, bonds, preferred shares, and obligations on them. That is why the decline in mNAV became such a painful signal. The market began to doubt whether the premium to bitcoin reserves would remain if the cryptocurrency continues to fall. Selling part of the bitcoins may support confidence in Strategy's liquidity, but at the same time call into question the previous model, where the company's growth was tied to the constant accumulation of the asset.
The context is broader than one company. Sentiment in digital assets remains an important factor for all major market participants—from Bitcoin and Ethereum to institutional players like BlackRock. But for Strategy, this dependence is especially strong: its valuation is directly linked to the price of bitcoin. That is why the market watches Strategy's actions as an indicator of the sentiment of large holders and institutional investors.
What Risks Are Associated With Selling Bitcoins
Even a partial sale does not eliminate all risks. For Strategy, the key ones remain:
- Market risk: a large transaction may increase pressure on the price of bitcoin and volatility.
- Regulatory risk: operations with digital assets require strict compliance and disclosure rules.
- Reputational risk: investors may see the sale as a departure from the previous accumulation strategy.
- Tax consequences: realizing a profit or loss can affect the financial result.
What Alternatives Does Strategy Have
Among the alternatives, market participants may consider holding bitcoins, hedging part of the position, issuing new financial instruments, or restructuring debt obligations. But such steps do not solve the main systemic problems: the long-term volatility of bitcoin, Strategy's valuation dependence on the cryptocurrency rate, and the complexity of the capital structure.
How Analysts Assess Strategy's Turnaround
“Ultimately, this new framework policy is a signal that Strategy is managing bitcoin as a treasury asset with real discipline in liquidity matters, not just as an ideological position. Whether this is good or bad depends on where bitcoin goes next. That has always been the only question that matters here,” said Bitget Wallet analyst Lacy Zhang.
“This is a responsible step by Saylor, and the market sees it as a positive event,” said cross-market analyst and Coin Bureau founder Nick Pakhrin.
“The compression of mNAV is a more serious problem. If the market starts to see Strategy as a slow-moving ETF with an add-on in the form of obligations on preferred shares, this multiplier will not recover. That's why they had to do something,” noted LO head of research Adam Morgan McCarthy.
“There are two paths ahead: either Strategy starts selling bitcoins, or its shares fall far enough for someone to buy the company for control and get the bitcoins below market price. In any case, for serious investors, this uncertainty itself is a reason to wait. And right now, money is going into AI, not cryptocurrencies,” said DWF Labs managing partner Andrey Grachev.
Despite the sharp drop in shares, most analysts remain positive on Strategy. According to MarketWatch, the recommendation breakdown is as follows:
- Buy: 17 analysts.
- Hold: 2 analysts.
- Sell: 0 analysts.
The Wall Street consensus target for Strategy shares is $336. This is about 308% higher than the closing price on June 26. Now the main question for investors remains: will bitcoin recover enough to once again support the premium in Strategy's valuation and its financing model.
{
“@context”: “https://schema.org”,
“@type”: “Article”,
“about”: [
{
“@type”: “Organization”,
“name”: “Strategy”
},
{
“@type”: “Thing”,
“name”: “Bitcoin”
},
{
“@type”: “Thing”,
“name”: “Cryptocurrency”
},
{
“@type”: “Thing”,
“name”: “Share”
},
{
“@type”: “Thing”,
“name”: “Dividend”
},
{
“@type”: “Thing”,
“name”: “Bond”
},
{
“@type”: “Thing”,
“name”: “US Dollar”
},
{
“@type”: “Organization”,
“name”: “BlackRock”
},
{
“@type”: “Thing”,
“name”: “Ethereum”
},
{
“@type”: “Product”,
“name”: “STRC”
}
]
}
