Strategy, formerly MicroStrategy, has started selling Bitcoin to replenish its U.S. dollar reserves, pay preferred stock dividends and interest, and repurchase Digital Credit Securities, according to a BIT research note cited by Odaily. The report says that one of Bitcoin’s key structural sources of demand is now turning into a source of selling pressure.
BIT also said the macro backdrop has improved. At the Federal Open Market Committee meeting in late July, only 3 of 12 voting members supported a rate hike, while a cooler labor market and easing inflation lowered the odds of a September increase. Even so, the report argues Bitcoin does not have the same kind of steady structural bid that supports stocks through pension allocations and corporate buybacks, or gold through central bank reserve diversification. In BIT’s view, Strategy’s continued sales have therefore become an important variable for near-term risk appetite.
BIT estimates Strategy may still need to sell about $4.5 billion in BTC
BIT said Strategy has accumulated roughly $62 billion worth of Bitcoin purchases and had even accelerated buying during earlier price declines. That pattern, the report says, has now reversed.
Analysts cited in the report estimate that the company may want to cut the outstanding size of STRC, its Digital Credit Securities, from about $10 billion to $5 billion. Selling Bitcoin could become the main funding source for that move. On that basis, BIT estimates Strategy may still need to sell about $4.5 billion worth of BTC, with the process likely to be completed in batches over the next two to four months.
The report says the amount is not especially large against the full size of the Bitcoin market, but the bigger issue is sentiment. Strategy had spent years acting as a structural buyer. It is now moving toward the role of a marginal seller. If sales continue at roughly $100 million a week, BIT says the pressure could last longer. The report adds that, unless a stronger macro catalyst brings a large return of spot Bitcoin ETF buying, short-term rebounds may stay capped.
NAV discounts widen across Bitcoin treasury companies
BIT argues the deeper shift is showing up in the capital model used by Bitcoin treasury companies. In the report’s framing, so-called BTC Yield was driven in large part by a premium between equity value and the net asset value of Bitcoin holdings. Once that premium narrows or flips into a discount, the model of raising capital in public markets and repeatedly buying more Bitcoin becomes harder to sustain.
Among 109 Bitcoin treasury companies tracked by BIT, 28 are currently trading below the value of their Bitcoin holdings, with mNAV below 1.0x, the report says. Those firms collectively hold about $3 billion worth of Bitcoin. For companies whose market value stays below asset value for a long time, BIT says selling part of their BTC and using the proceeds for share buybacks could become one way to narrow the NAV discount and unlock shareholder value.
That means potential selling pressure may not be limited to Strategy. BIT estimates the combined potential amount of Bitcoin sales from treasury companies could reach as much as $7.5 billion in the coming months. The report also says these firms may need to move away from a financing model built on NAV premiums and toward strategies that generate actual income, including covered call writing on Bitcoin, BTC lending, or basis trades.
Discounted implied BTC prices may also create room for re-rating
BIT says the widening NAV discount has another side. For some treasury companies, the implied Bitcoin price embedded in their shares is now only about $20,000, while spot Bitcoin is around $63,000, or roughly 0.3x by comparison. The report contrasts that with November 2024, when MicroStrategy’s share price at one point implied a Bitcoin value at 2x to 3x the actual spot price.
In BIT’s view, some of these companies could see meaningful valuation recovery if management teams take active steps to narrow the discount.
Report keeps focus on Strategy sales, ETF flows and capital strategy changes
Overall, BIT says Strategy’s shift from a long-term structural buyer to a seller is changing the flow structure of the Bitcoin market. It estimates the company may still sell around $4.5 billion in BTC over the next two to four months, while the broader pool of potential sales from Bitcoin treasury companies could reach about $7.5 billion. The report says that could continue to weigh on short-term risk appetite.
At the same time, BIT said this change does not alter its view that Bitcoin is forming a bottom, and that the cycle low could still be established by the end of this month or next month. The report says the next key questions are when Strategy’s selling is fully absorbed, whether ETF buying returns, and whether Bitcoin treasury companies trading at NAV discounts can unlock value through changes in capital strategy.
Odaily said part of the view came from BIT on Target, and the full report is available through direct contact with the institution.
Disclaimer: Markets carry risk, and investment requires caution. This article does not constitute investment advice. Digital asset trading can involve significant risk and volatility. Investment decisions should be made only after considering personal circumstances and consulting financial professionals. BIT said it is not responsible for any investment decision made on the basis of the information provided in the content.