Here’s Why Strategy Sold $216M Worth of Bitcoin

By now, we have seen the historic news of Saylor’s Strategy selling $216M in Bitcoin. Some of you may be shocked, or confused as this contradicts his promise to “never sell your Bitcoin”.

I broke down the mechanics in a full analysis, figuring out why Strategy unfortunately has to do so, here's the short version.

STRC (Stretch) is Strategy’s preferred stock, designed to provide investors with a steady cash dividend while giving Strategy additional capital to purchase more Bitcoin.

Strategy's STRC preferred stock is supposed to trade near $100 (its "par" value), defended by Strategy raising or lowering its dividend rate. In April, STRC broke that parity and kept falling, hitting an all-time low of $71.25 in June. Strategy hiked the rate to fix it (11.50% to 12.00%), and price partially recovered to the high $80s, but still below par.

The problem: Without STRC being at par, Strategy cannot effectively raise further funds to buy BTC

Since STRC is still below par, Strategy is going to have to raise rates further and this would put further strain on Strategy’s cash reserve. A reserve which back in May, for unrelated reasons actually dropped below its own 12-month safety minimum. To rebuild their cash reserve, they had to raise capital and part of that rebuild unfortunately meant selling $216M in Bitcoin.

The real insight is what’s next, Strategy is currently authorized to sell up to $1.25B for this purpose of funding dividend payments. They have used $216M of that (17%) but STRC is still trading below par (~$88 as of writing), so this pressure hasn’t gone away. Nothing's confirmed, but I wouldn't be surprised if we see more sales.

Full breakdown with charts and sourcing: https://www.coingecko.com/learn/why-strategy-sold-216m-bitcoin