Strategy Authorizes up to $1.25B of Bitcoin Sales as Saylor Formalizes Capital Pivot

Michael Saylor's Strategy said it can now sell Bitcoin to fund dividends, interest and stock buybacks, formalizing a capital pivot for the world's largest corporate holder of the cryptocurrency.

The company, which holds 847,363 BTC, said in a press release and an 8-K filing with the U.S. Securities and Exchange Commission on Monday that its board approved a "Digital Credit Capital Framework" with five parts: a U.S. dollar reserve policy, a revised dividend policy for its STRC preferred stock, a $1 billion buyback program for its preferred securities, a $1 billion buyback program for its MSTR common stock, and a Bitcoin monetization program. Saylor also announced the framework in a post on X.

Under the framework, Strategy raised the annual dividend rate on its Variable Rate Series A Perpetual Stretch Preferred Stock, known as STRC, to 12% from 11.5%, effective for record dates on or after July 1. It set its dollar reserve at about $2.55 billion as of June 28, enough to cover roughly 17.4 months of preferred dividends and interest against annual obligations of about $1.76 billion.

The board authorized up to $1.25 billion of Bitcoin sales to rebuild that reserve, which the company said would bring total dividend and interest coverage to about $3.8 billion, or 25.9 months.

The plan codifies what was once unthinkable for Strategy: that it may sell Bitcoin. Saylor built the company's identity on accumulating and holding the asset, and its 847,363 BTC are now worth about $50.4 billion against an average purchase cost near $75,646, leaving the position roughly $14 billion underwater with Bitcoin trading at $59,427.

The framework arrives as STRC, the preferred stock Saylor markets as "Digital Credit," has slipped well below its $100 target, raising questions about whether the company can keep funding its obligations through share sales alone.

MSTR rose after the announcement and it’s up more than 7% to $88.81, while STRC is up more than 9% to $81.45. BTC briefly ticked above $60,400 before easing to $59,427, down 0.9% over the prior 24 hours, according to CoinGecko data. The token has fallen more than 18% over the past month.

Selling BTC

The Bitcoin monetization program lets Strategy sell BTC for three purposes: to generate up to $1.25 billion for the dollar reserve, to fund preferred dividends and interest when management judges selling Bitcoin more advantageous than issuing common stock, and to fund the two buyback programs. Any sales beyond those purposes require further board approval. The company said the program does not obligate it to sell any Bitcoin.

Strategy also adopted a policy requiring it to hold a dollar reserve equal to at least 12 months of dividends and interest, or about $1.76 billion, with any drop below that level requiring board authorization. The reserve can be used only for preferred dividends and debt interest.

"Strategy remains committed to Bitcoin as its primary treasury reserve asset," Saylor said in the release. "At the same time, Digital Credit requires liquidity, discipline, and active capital management. This framework is designed to strengthen credit quality and enable the Company to reduce expected preferred stock dividend payments when accretive."

In the press release, Chief Executive Phong Le framed the shift as a move "from one-way capital issuance to active capital management."

Analysts Called It

The framework delivered close to what one widely followed analyst predicted. Zach Pandl, head of research at Grayscale, laid out two scenarios for the week in a post on X on Saturday.

"What I think happens: increase in STRC dividend of 50bp, which equates to ~$100mn higher dividend obligation for next 2yrs; probably does not help market confidence," Pandl wrote. Strategy did exactly that, lifting the rate 50 basis points to 12%.

Pandl's preferred outcome was a larger Bitcoin sale.

"What I hope happens: sale of ≥ ~$3bn $BTC to cover nearly all cash obligations for next 2yrs," he wrote, adding that such a move "probably would restore market confidence."

The board authorized less than half that figure for reserve-building, capping reserve-directed Bitcoin sales at $1.25 billion, though the broader monetization program leaves room for additional sales to fund dividends and buybacks.

The framework signals that Strategy intends to slow its reliance on issuing new MSTR shares. The company said it expects to stay "disciplined" with common equity issuance, "particularly when the Company's common stock trades at or near 1x mNAV per Share" — a reference to the point at which its market value approaches the value of the Bitcoin it holds.

Crash BTC

Not everyone agrees that selling Bitcoin would help. Longtime Bitcoin critic Peter Schiff argued on X that any sale by Strategy would backfire.

"$MSTR can't sell Bitcoin without crashing the price of Bitcoin," Schiff wrote. "Even if Strategy merely stops buying Bitcoin, that change alone would crush the market."

Some Bitcoin advocates contend the company does not need to sell at all.

Samson Mow argued in a post on X that STRC contains a "self-repairing mechanism": once the preferred stock trades below its $100 reference price, Strategy stops issuing new shares through its at-the-market program, cutting supply and lifting the effective yield for new buyers until the price recovers toward par.

Strategy said it will review the STRC dividend rate monthly, weighing factors including the stock's trading level, market yields, credit spreads, Bitcoin's price and reserve coverage. The company said it expects to disclose any material Bitcoin sales and balance-sheet changes through its customary 8-K filings.

Whether the framework narrows STRC's discount to par, and whether Strategy chooses to sell any Bitcoin under its new authorization, will be the next tests of the model.