Arca is pushing back hard on Michael Saylor's explanation for last week's bitcoin sell-off. In his weekly note, Arca Chief Investment Officer Jeff Dorman said the market pressure was “clearly due to the Saylor/MSTR news,” rejecting what he described as “gaslighting from MSTR and other Bitcoin bulls.”
Bitcoin fell nearly 14% last week to $60,000. The drop came after Strategy disclosed on June 1 that it had sold 32 BTC in the prior week. That amount was worth roughly $2.5 million. Even after the sale, Strategy still held 845,256 BTC, a position worth billions of dollars.
The market reaction was about the message behind the sale
Saylor said the decline was tied to capital being pulled into AI infrastructure at a historic scale. He argued that the AI buildout was creating temporary pressure across global markets, while maintaining that bitcoin's long-term case as scarce, liquid digital capital remained intact.
Dorman's response focused on a different issue. In Arca's view, the problem was not the size of the sale itself, but what it suggested about Strategy's balance sheet. If the company needed to sell bitcoin to meet cash dividend obligations on preferred shares, including STRC, the market would have to price in the risk of more sales ahead. That implication, not the 32 BTC alone, is what Arca says hit sentiment.
Arca outlines the overhang and one possible fix
Dorman wrote that Saylor had made several mistakes over the past three weeks. He said Strategy used its only cash to pay off zero-coupon debt, then unsettled markets by signaling a bitcoin sale that was barely enough to cover one month's preferred dividends. Dorman added that the company has roughly five months of cash flow remaining, leaving investors focused on what comes next.
He also laid out one scenario that could calm the market. If Saylor were to announce in an 8-K filing that Strategy had raised $2 billion to $4 billion through sales of MSTR stock and bitcoin, enough to fund preferred dividends through September 2028, Dorman believes markets could rebound sharply. That would remove the forced-seller overhang. Still, he said he does not expect Saylor to take that route, arguing instead that monthly drip sales to cover dividends are the more likely outcome, keeping steady pressure on bitcoin.