Strategy’s $216 Million Bitcoin Sale Funds STRC Preferred Dividends

Michael Saylor’s Strategy sold $216 million of Bitcoin between June 29 and July 5, 2026, to cover dividends on its STRC preferred stock. It was the largest crypto liquidation in the company’s six-year Bitcoin history, according to the Monday Form 8-K filing.

The same filing booked a Q2 digital-asset loss of $8.32 billion, almost entirely unrealized, and noted that the average cost of Strategy’s hoard now exceeds Bitcoin’s market value, a condition that forces a full valuation allowance against the company’s deferred tax asset.

Two Sales, $216 Million Apart

Strategy filed the disposals in two tranches. Between June 29 and June 30, the company sold 1,363 BTC for about $80.8 million at an average price of $59,256. Between July 1 and July 5, it sold a further 2,225 BTC for about $135.2 million at an average price of $60,773, per the filing.

Both rounds cleared well below Strategy’s average purchase price of $75,476, a gap that doesn’t register as a transactional loss on these disposals because the coins are carried at cost. The drop sits in the unrealized mark on the rest of the 843,775-coin stack that remained on the balance sheet as of July 5. The filing disclosed no share repurchases and no ATM sales during the same window.

The Q2 Filing and the Hidden Cost

Strategy reported a digital-asset loss of $8.32 billion for the three months ended June 30, of which $8.31 billion was unrealized. The filing disclosed a Bitcoin carrying value of $49.67 billion against an aggregate purchase price of $63.94 billion, an average cost of $75,578 per coin.

That gap has a second-order effect. Because cost basis now exceeds fair value, Strategy will record a valuation allowance against its deferred tax benefit and deferred tax asset tied to the unrealized loss, removing the expected tax shield from its current balance sheet. The accounting step shows up as a single line in the Q2 filing, and it ties back to the same price move that triggered the sale.

The company held 846,000 BTC as of June 30 and 843,775 BTC as of July 5, with the sales accounting for the difference. The break comes with one piece of context: the dollar mark on remaining holdings is still calculated against the pre-sale purchase price, leaving the unrealized loss figure intact even after the disposals.

• Q2 2026 digital-asset loss: $8.32 billion
• Unrealized portion: $8.31 billion
• Bitcoin carrying value, June 30, 2026: $49.67 billion
• Aggregate BTC purchase price, June 30, 2026: $63.94 billion
• Bitcoin held as of July 5, 2026: 843,775 BTC

The Framework’s Five Capital Tools

Strategy’s board adopted a Digital Credit Capital Framework on June 29, the same day the first BTC disposal began. The framework introduced explicit permission to monetize the Bitcoin treasury. It bundled five tools in the same package, each designed to manage the funding gap on the preferred stack without forcing an outright fire sale of the reserve asset.

Michael Saylor, founder and executive chairman, said in the release: “Strategy remains committed to Bitcoin as its primary treasury reserve asset. At the same time, Digital Credit requires liquidity, discipline, and active capital management.” Phong Le, chief executive officer: “Strategy is evolving from one-way capital issuance to active capital management.” Andrew Kang, executive vice president and chief financial officer: “Bitcoin is capital.”

• A Board-approved USD Reserve policy, with a stated minimum of 12 months of preferred dividend and interest coverage, currently $2.55 billion for 17.4 months of forward obligations of about $1.76 billion a year.
• A revised STRC dividend policy raising the rate from 11.50% to 12.00% for semi-monthly periods with record dates on or after July 1, 2026.
• A $1.0 billion repurchase authorization covering the company’s Digital Credit Securities, including STRC, STRF, STRD, and STRK.
• A $1.0 billion repurchase authorization for MSTR common stock.
• A BTC Monetization Program capping board-authorized reserve-building BTC sales at $1.25 billion, with the full capacity still unused as of July 5.

Strategy’s USD Reserve stood at $2.55 billion on June 28, the press release disclosed. Combined with the $1.25 billion in authorized BTC sales, that gives the company about 25.9 months of preferred dividend and interest coverage against an expected annual obligation of approximately $1.76 billion, before any further rate changes. The full press text sits in Strategy’s June 29 framework press release.

STRC and the Funding Loop

Every dollar raised through preferred-share sales flowed into Bitcoin purchases. Every dividend paid out of those dollars now needs a separate cash source. STRC, Strategy’s Variable Rate Series A Perpetual Stretch Preferred Stock, is the hinge between the two halves of the loop.

STRC traded at $89 on Monday, per Fortune, well below its $100 par. The share price slipped from a $99 to $101 anchor earlier in 2026 to the $73 to $74 range at its June low, a stretch that pushed its effective yield, calculated against a one-month VWAP of $91.46, up to about 15%. The 50-basis-point dividend bump to 12% targets a $99 to $100 trading range, but the framework release carries an explicit caveat that the stock “may vary, including significantly lower, from such range.”

When STRC trades near par, Strategy can issue more shares and keep buying. When STRC trades 26% below par, as it did in late June, that issuance engine stalls, and the cash it raised gets reassigned to paying itself back. Saylor, in the press release, kept the chain explicit: the framework is “designed to strengthen credit quality and enable the Company to reduce expected preferred stock dividend payments when accretive.” The product’s mechanics live on Strategy’s STRC product page.

Strategy is evolving from one-way capital issuance to active capital management.

That observation came from Phong Le, chief executive officer of Strategy, in the June 29 press release announcing the Digital Credit Capital Framework.

From “You Do Not Sell Your Bitcoin” to a Forced Sale

In October 2025, per Fortune, Saylor was unequivocal. “You do not sell your Bitcoin,” he said. Bitcoin’s price has since dropped more than 43%, and MSTR’s stock has dropped more than 37%, per Fortune, with an October 10, 2025 leveraged-liquidation cascade of more than $19 billion erasing much of the post-election rally.

The first crack came on the May 5, 2026 Q1 earnings call. Saylor told analysts that Strategy “will probably sell some Bitcoin to pay a dividend just to inoculate the market and send the message that we did it,” a hedge the company elaborated through mid-June interviews about alternative capital sources.

Strategy followed the language with action. Between May 26 and May 31, 2026, the company sold 32 BTC for about $2.5 million at an average net price of $77,135, a rounding-error trade that Strategy’s May 30 SEC Form 8-K recorded as the first disclosed net Bitcoin disposal since 2022. That December 2022 trade, of 704 BTC against a 2,395-coin purchase, was a tax-loss harvesting exercise rather than a net reduction.

The June and July 2026 disposals turn Saylor’s framing into a recurring lever. The Digital Credit Capital Framework authorizes the company to monetize up to $1.25 billion of Bitcoin for USD Reserve funding alone, with no fixed expiration. The week’s move followed a June 27 post from Zach Pandl, Grayscale’s head of research, that selling at least $3 billion in Bitcoin to cover two years of cash obligations was his preferred path for Strategy, a view the framework’s first real trade edges toward without committing to scale. The full $1.25 billion remained unused as of July 5. The underlying argument sits in the case for a multibillion-dollar Bitcoin sale.

How the Sell-Side Is Pricing It Now

TD Cowen cut its MSTR price target to $260 from $400 this week, citing a lower Bitcoin forecast (about $100,000 by year-end 2026, down from about $140,000) rather than any rethink of the new framework. The bank kept its Buy rating and described the framework as “incrementally constructive.”

Canaccord Genuity and Mizuho moved in parallel. Canaccord cut its target to $130 from $163; Mizuho trimmed to $265 from $320. MarketBeat’s consensus now sits at a Moderate Buy with an average target of $301.57, the spread reflecting how widely analysts disagree on the size of the Bitcoin drag rather than on the framework. The calculation underpinning TD Cowen’s cut lives in the breakdown of the bank’s note.

The Bitcoin price hasn’t given the framework a friendly start. Bitcoin traded at about $61,934 at 8:45 a.m. ET on Monday, Fortune reported, a $752 drop from the prior day. MSTR traded 2.41% lower at $98.34, with shares falling nearly 5% at market open before recovering to $100, per Fortune. STRC traded at $87.40 in pre-market hours according to Investing.com.

Peter Schiff, the economist and longtime Bitcoin critic, took the opposite side. He posted that $MSTR can’t sell Bitcoin without crashing the price of Bitcoin. Blockstream CEO Adam Back argued the opposite, telling critics pricing STRC as distressed debt that they were missing the picture and pointing to long-dated converts. Both critiques land at the same moment the framework’s first sale clears, and both rely on the same numbers.

Frequently Asked Questions

How much Bitcoin did Strategy sell?

Strategy sold 3,588 BTC for about $216 million between June 29 and July 5, 2026, in two tranches, per the Form 8-K filed on July 6.

What was the average sale price?

The combined average sale price sits between $59,256 and $60,773 per coin, well below Strategy’s average purchase price of $75,476 as of July 5, 2026.

What is STRC?

STRC is Strategy’s Variable Rate Series A Perpetual Stretch Preferred Stock, designed to trade near its $100 par. The annual dividend on STRC moved to 12% for semi-monthly periods with record dates on or after July 1, 2026.

Why did Strategy sell Bitcoin now?

The Digital Credit Capital Framework adopted on June 29, 2026 explicitly authorizes Bitcoin sales to fund preferred dividends and replenish the USD Reserve, up to $1.25 billion in board-authorized reserve-building sales.

Does Strategy still plan to buy Bitcoin?

The June 29 release quotes Michael Saylor: “Strategy remains committed to Bitcoin as its primary treasury reserve asset.” Strategy didn’t purchase Bitcoin in the period ending July 5, 2026.

Disclaimer: This article is for informational purposes only and does not constitute financial, investment, or tax advice. Bitcoin and crypto-related equities carry substantial risk, including total loss of principal. Figures cited above reflect Strategy’s Form 8-K filings and contemporaneous price reports as of publication on July 7, 2026. Consult a qualified professional before making investment decisions.