Strategy’s 6,948 BTC sales were a narrative risk: Bitfinex

Strategy’s two-week pause in Bitcoin sales has removed a three-month sentiment barrier after the company disposed of 6,948 BTC between late May and early August, according to Bitfinex analysts.

Bitfinex analysts said in an Aug. 28 report that Strategy’s 6,948 BTC in disposals were small compared with daily spot trading volume, but the company’s status as the largest corporate Bitcoin holder gave each weekly sale added weight among traders.

“The largest corporate holder is selling” became a recurring bearish argument between May and August, the analysts said. Although the sales did not create a large supply shock, each Monday filing left open the possibility that more coins could reach the market.

Strategy’s latest Form 8-K, covering Aug. 17 through Aug. 23, reported no Bitcoin purchases or sales. The filing was the second consecutive weekly disclosure with no change to the company’s 840,447 BTC balance.

With Bitcoin trading near $78,700, Strategy’s holdings have also moved above their average acquisition price of $75,385. The company paid about $63.36 billion for the position, including fees and expenses, placing its current value near $66 billion at the price cited by Bitfinex.

Strategy’s 6,948 BTC sales carried more symbolic weight

Strategy began selling Bitcoin in late May, ending a multiyear period during which its treasury had largely moved in one direction.

As crypto.news reported in June, the first transaction involved 32 BTC sold at an average price of $77,135. The disposal raised about $2.5 million and represented only 0.0038% of the company’s holdings at the time, but it was Strategy’s first reported Bitcoin sale since a tax-related transaction in December 2022.

Executive chairman Michael Saylor had prepared investors for the possibility during Strategy’s first-quarter earnings call. After the company reported a $12.54 billion net loss, driven mainly by unrealized losses on its Bitcoin holdings, Saylor said Strategy would “probably sell some Bitcoin to fund a dividend” and “inoculate the market.”

Larger disposals followed as Bitcoin remained under pressure during the summer. Strategy sold 3,588 BTC for approximately $216 million in early July to fund dividends tied to its preferred securities. It later sold 1,638 BTC for $104.73 million during the week ending Aug. 2, followed by another 1,690 BTC for $108.6 million through Aug. 9.

The company used the later proceeds for STRC dividends and repurchases. Its Aug. 10 filing showed that the entire $108.6 million generated from the 1,690 BTC sale went toward buying back roughly 1.15 million STRC shares.

By early August, the accumulated sales had reduced Strategy’s reserve to 840,447 BTC. Bitfinex calculated that all disposals from late May through early August totaled 6,948 BTC and generated about $432.5 million.

Against daily Bitcoin spot volume, the analysts described the amount as “a rounding error.” Market attention instead centered on whether preferred-stock obligations could turn Strategy into a recurring seller whenever its other funding channels weakened.

MSTR issuance has replaced Bitcoin as the funding source

Rather than sell more Bitcoin, Strategy raised about $2.01 billion in net proceeds by issuing approximately 18.26 million MSTR common shares between Aug. 17 and Aug. 23. The total was around six times the amount raised during the previous reporting week.

Strategy spent $136.4 million of the proceeds to repurchase about 1.43 million STRC shares below their $100 stated amount. Another $300 million went into its U.S. dollar reserve, increasing that balance from $4.8 billion to $5.1 billion.

The remaining $1.59 billion was deposited into a newly created cash account. Combined with the existing reserve, the two accounts held approximately $6.69 billion as of Aug. 23.

During the same period, Strategy bought no Bitcoin. The company has now raised roughly $2.35 billion through MSTR issuance across two weeks without directing any of the proceeds into BTC, according to the Bitfinex report.

Capital has instead gone toward preferred-stock repurchases, dividend coverage, and additional liquidity. Management designed the dollar reserve to cover payments on Strategy’s preferred shares and outstanding debt, reducing the need to sell Bitcoin when recurring cash obligations come due.

The latest allocation follows an earlier no-sale week in which Strategy raised $333.7 million through MSTR issuance. Of that amount, $149.1 million entered the dollar reserve, $132.2 million funded STRC repurchases, and $52.4 million covered STRC dividends.

Bitfinex said the pattern indicates that management currently prefers issuing common stock before disposing of additional Bitcoin. With the reserve now providing close to three years of payment coverage, the analysts viewed another BTC sale as less likely unless STRC suffers severe price pressure and other funding options become less attractive.

Strategy remains neutral rather than a Bitcoin buyer

The end of weekly sales has not yet restored Strategy’s former role as a steady source of Bitcoin demand.

Over the past two reporting periods, the company neither bought nor sold BTC, leaving its position unchanged at 840,447 coins. Bitfinex, therefore, described Strategy as neutral rather than an active buyer.

Bitcoin now competes with several uses for the capital raised through MSTR issuance. Strategy can direct the funds toward STRC repurchases, preferred dividends, debt payments, its dollar reserve, the new cash account, or additional Bitcoin purchases.

President and chief executive Phong Le has said the company expects to resume accumulation during 2026. In August, Le linked future purchases to STRC recovering toward its $100 stated amount, where Strategy could issue additional preferred shares on better terms.

“We’ll continue to build that. And yeah, when Stretch gets back to par, we’ll issue more. We’ll buy more Bitcoin,” Le said during an earlier interview.

Strategy has not provided a date or amount for its next purchase. Its filings show that supporting STRC and building cash have taken priority while the preferred stock remains below the level management wants to maintain.

Bitfinex also identified dilution as a remaining risk for MSTR holders. Issuing common shares when the stock trades at a reduced premium to the company’s Bitcoin value can weaken the Bitcoin-per-share measure that Strategy uses when discussing shareholder performance.

A renewed Bitcoin decline toward the low-$60,000 range could also tighten the company’s financing position, according to the analysts. During the summer sell-off, a weaker BTC price pushed Strategy’s holdings below cost while lower MSTR prices made common-share issuance more dilutive.

U.S. investors face exposure through MSTR and STRC

Strategy’s capital decisions directly affect U.S. investors because MSTR and STRC trade on Nasdaq, while the company reports its weekly Bitcoin and securities transactions through filings with the U.S. Securities and Exchange Commission.

MSTR investors gain indirect Bitcoin exposure through a public company, but their returns can differ from BTC’s performance because Strategy also issues common stock, pays preferred dividends, services debt and repurchases securities. Preferred shareholders rank ahead of common shareholders for dividend payments and certain claims.

The latest filing showed that Strategy sold MSTR at an average price of about $110 per share, up from approximately $96 during the previous week, according to Bitfinex. The higher price allowed the company to raise more cash per share while Bitcoin’s recovery placed its remaining treasury above its average acquisition cost.

STRC remains another factor in the company’s capital plan. Strategy designed the variable-rate perpetual preferred stock to trade near $100 and has maintained its annualized dividend rate at 12% for August while conducting regular repurchases below the stated amount.