MSTR disclosed the sale of 3,588 bitcoins, with its stock price dropping as much as 5% during trading.

Strategy is rewriting its business model. The world's largest corporate holder of Bitcoin disclosed on July 6 that between June 29 and July 5, it sold 3,588 Bitcoins, cashing in about $216 million to pay dividends on its preferred shares. This was not only the largest Bitcoin sale in the company's history, but also the third sale since it launched its Bitcoin strategy in 2020.

This sale sends an important signal: Bitcoin is gradually shifting from being a strategic reserve with a "buy only, never sell" stance at Strategy, to an asset used to manage liquidity.

According to Bloomberg, the company just expanded its authorization last week, allowing it to sell Bitcoin to supplement liquidity when new share financing becomes less attractive. This adjustment comes at a time when both Bitcoin and Strategy’s stock price are under pressure. Over the past year, MSTR has fallen by about 75%, and Bitcoin has dropped more than 45% from its historic high.

After the news was released, Strategy’s stock price dropped more than 5% during trading, and Bitcoin fell to around $61,800, below the company’s average holding cost of about $75,700.

"Never Sell" Begins to Waver

Strategy had long regarded its "never sell Bitcoin" commitment as the cornerstone of its business model, but this promise has now clearly begun to soften.

At the end of May this year, the company broke its tradition for the first time by selling 32 Bitcoins, cashing in about $2.5 million to pay preferred share dividends. At the time, the company stressed that it was only fulfilling commitments to preferred shareholders and that this did not signal a strategic shift.

However, the latest round of sales has expanded dramatically to 3,588 Bitcoins, about a hundred times the amount sold in May. According to company disclosures, 1,363 were sold at an average price of $59,300, and the remaining 2,225 at about $60,800. This indicates that selling Bitcoin is no longer a one-off symbolic act, but is gradually becoming part of the company’s regular financing system.

$1.5 Billion Dividends Per Year, Massive Sales Revealing Tight Finances

The proceeds from this sale will be specially used to pay second quarter dividends for STRF, STRE, STRK, STRD four preferred securities, and the June monthly dividend for STRC. Analyst Zach Pandl pointed out that Strategy’s annual preferred share dividend payments total about $1.5 billion, while its software business cash flow falls far short of covering this. When cash reserves are insufficient, the company can only continue financing or sell Bitcoin.

As of July 5, Strategy holds 843,775 Bitcoins, cash reserves of $2.55 billion, and an average holding cost of about $75,700. Although after the first sale at the end of May, the company quickly bought another 1,550 Bitcoins, and completed large purchases of $2.54 billion and $2 billion in April and May respectively, this sale does not mean an end to buying, but rather flexible adjustment within the system.

Strategy’s operating logic has become increasingly clear: when financing is smooth, it continues to buy Bitcoin; when financing becomes tight, it sells a small amount of Bitcoin to pay dividends, maintaining a closed loop in its capital operations system. According to Bloomberg, the company recorded a digital asset loss of $8.32 billion in the second quarter, as Bitcoin prices dropped 14%, further increasing pressure on cash flow management.

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