Since its historic first Bitcoin purchase in August 2020, Strategy (formerly MicroStrategy) stood as the ultimate “diamond hand” in corporate crypto — the poster child of the “DAT treasury model” that used leveraged financing to accumulate the digital asset. That three-year buying streak came to an abrupt halt last week. The company disclosed it had sold 32 Bitcoin at an average price of $77,135, pocketing $2.5 million. The news sent Bitcoin tumbling below $71,000, to around $70,560, and dragged down crypto-linked stocks: Bullish fell 7.99%, DeFi Development 7.97%, Circle 7.11%, Strategy itself 5.85%, and Upexi 5.04%. The sell-off poured more pressure on an already liquidity-starved market, accelerating the capital exodus at a time when centralized exchanges are racing to offer U.S. stock trading.
This is not Strategy’s first-ever Bitcoin sale. In December 2022, as the implosion of FTX pushed Bitcoin below $20,000, the company sold 704 BTC at $16,776 on December 22 — only to buy back 810 BTC at $16,845 just two days later, effectively repositioning after the crash. This time, however, the motivation is different: the sale was made to cover dividend payments on STRC, its fixed-income digital credit product. Dubbed the firm’s “flagship offering,” STRC has become a source of stress after Strategy repurchased $1.5 billion in convertible debt last month, leaving its cash reserves at roughly $871 million. That amount can only cover an estimated $1.7 billion in annual preferred dividends for about six months. On May 29, STRC dipped to $97.11 before closing at $98.57, reflecting deep concerns over Strategy’s cash flow.
Strategy’s Q1 earnings report, released in early May, had already painted a troubling picture. The company posted a staggering net loss of $12.54 billion, almost entirely from unrealized Bitcoin losses of $14.46 billion. As of the end of Q1, Strategy held 818,334 BTC with a total cost basis of $61.81 billion, at an average purchase price of roughly $75,537 per coin. The filing explicitly warned that “if convertible notes mature or are redeemed without being converted into common stock, the company may need to sell common stock or Bitcoin to generate sufficient cash to satisfy these obligations.” That scenario has now begun to unfold. From a corporate standpoint, the decision is rational, and founder Michael Saylor previously stated that “even if we sell 1 BTC, we will buy 10 to 20 times more.” Yet for market confidence, the sale marks a symbolic failure of the “DAT treasury model,” shaking the conviction that led many to believe in perpetual corporate hoarding.
Reactions were swift and negative. Economist and gold bug Peter Schiff called the sale a clear signal that Strategy has shifted from being “the largest buyer” to a seller, questioning where incremental demand will come from. Billionaire investor Mark Cuban confirmed he has sold most of his Bitcoin holdings, citing eroding faith in Bitcoin as a hedge against fiat depreciation and geopolitical risks. His disappointment with the “digital gold” narrative was palpable. JPMorgan’s analysis added to the gloom, noting that “debasement trades” in both gold and Bitcoin are heating up as investors rush out of perceived safe havens.
Adding a layer of dark comedy to the saga, the prediction market Polymarket experienced a judgment fiasco over whether “Strategy would sell BTC before May 31.” At one point, the probability hovered around 40%. On June 1, however, it briefly spiked from a low of 12% to 80% before settling at 58%, with total trading volume exceeding $16.4 million. Because no official statement confirming the sale was released in time, the market ultimately resolved to “Strategy did not sell BTC in May.” The episode served as a reminder that prediction markets trade on “events within defined rules,” not the full truth.
Amid the turmoil, Michael Saylor published a themed article on May 28 titled “HODL” (Hold On for Dear Life), urging steadfastness in a depressed market. The reality, however, is stark: Strategy still holds 843,706 BTC valued at $60.94 billion, with an average cost of $75,699 — leaving an unrealized loss of $2.93 billion. Just last month, the position had briefly swung to an unrealized gain of $8.2 billion during a market bounce. The dramatic swing epitomizes the extreme volatility of Bitcoin.
Strategy’s fate is now tightly linked to Bitcoin’s price. With prices grinding lower, the crypto market seems left with little hope — perhaps waiting for the Trump administration to “fall in love with crypto once more” to spark a turnaround.
