Last week, Strategy—the company long hailed as “the #1 DAT stock” and “Bitcoin’s largest diamond hands”—sold Bitcoin for the first time in nearly three years. According to its disclosure, the firm sold 32 BTC at an average price of $77,135, raising $2.5 million. The news quickly roiled markets: BTC briefly dipped below $71,000 overnight, hovering around $70,560; crypto-related US stocks tumbled, with Bullish down 7.99%, DeFi Development 7.97%, Circle 7.11%, and Strategy itself 5.85%, while Upexi fell 5.04%. With liquidity already tight, Strategy’s halt on buying and a modest sale added further strain to an already fragile crypto market.
A Precedent from 2022
This is not Strategy’s first-ever BTC sale. During the crypto winter of 2022, following the FTX collapse, Bitcoin briefly fell below $20,000. On December 22, 2022, Strategy sold 704 BTC at $16,776, only to repurchase 810 BTC two days later at $16,845 in a quick round-trip trade. What makes the current sale unique is that it breaks a more than three-year period of only accumulating, marking a symbolic end to the unwavering hoard narrative.
STRC Dividend Pressure Forces the Sale
The direct trigger for the sale was the need to meet dividend obligations on STRC, the fixed-income digital credit product that is core to Strategy’s capital structure. After repurchasing $1.5 billion in convertible notes last month, the company’s cash reserves dropped to roughly $871 million—covering only about six months of its estimated $1.7 billion annual preferred dividend burden. On May 29, STRC briefly fell to $97.11 before closing at $98.57, reflecting heightened concern over Strategy’s ability to service its obligations.
Earnings Report Had Already Raised Red Flags
Strategy had warned in its Q1 earnings report that if convertible notes were not converted into equity at maturity, it “may need to sell common stock or bitcoin to generate sufficient cash to meet these obligations.” Q1 results showed a net loss of $12.54 billion, almost entirely from unrealized bitcoin losses of $14.46 billion. As of the end of Q1, the company held 818,334 BTC with a total cost basis of $61.81 billion, implying an average purchase price of around $75,537. The sale, therefore, was not a spontaneous decision but a near-inevitable response to liquidity pressures.
Confidence in the Hoard Thesis Takes a Heavy Blow
While the sale can be justified from a corporate finance standpoint—and Michael Saylor himself had said “if we sell 1 BTC, we will buy 10 to 20 times more”—the market perceives the move as a sign that the DAT treasury model is dead-locked. Strategy still holds 843,706 BTC worth about $60.936 billion, with an average cost of $75,699 per coin and an unrealized loss of $2.932 billion. By contrast, just last month amid a broader market rebound, its position was showing an unrealized gain of $8.2 billion, a stark reversal that underscores the market’s fragility.
Adding to the irony, on May 28 Saylor published a blog post titled “HODL,” urging the market to hold firm during the downturn. Strategy’s subsequent sale stands in sharp contrast to that evangelist stance, further shaking the faith in the “never-sell” narrative.
Prediction Market Drama
The sale also triggered a dramatic episode on Polymarket. The probability of “Strategy sells BTC before May 31” had been hovering around 40%. On June 1, it spiked from as low as 12% to 80% before settling at 58%, with over $16.4 million in cumulative trading volume. However, because Strategy did not issue an official sale statement for that period, the market ultimately resolved as “Strategy did not sell BTC in May.” The wild swings highlight traders’ intense focus on symbolic events, and once again prove that prediction markets trade on rules-based outcomes rather than absolute truth.
Bearish Voices and Lingering Uncertainty
Reactions to Strategy’s sale were swift and bearish. Economist and gold advocate Peter Schiff called it a signal that Strategy is pivoting from the largest buyer to a seller, questioning where future demand will come from. Billionaire Mark Cuban disclosed that he has already sold most of his Bitcoin holdings, citing diminished confidence in BTC as a hedge against fiat debasement and geopolitical risk, disappointed by the “digital gold” narrative. JPMorgan also noted that the “devaluation trade” in gold and bitcoin is heating up, with investors rotating out of safe-haven assets. As prices continue to grind lower, the crypto market may find its only near-term hope in a renewed embrace of crypto by the Trump administration.