Bitcoin treasury model tested as Strategy sells 3,588 BTC

• ​Strategy announced the sale of 3,588 BTC for $216 million to fund its Digital Credit dividends.
• The sale marks Strategy's second redemption of its Bitcoin holdings and follows the approval of a BTC monetization program.
• The 'never sell' Bitcoin treasury model could face immense pressure if Strategy continues to liquidate BTC holdings to fund dividend payments.

Bitcoin (BTC) briefly dropped below $63,000 on Monday after Strategy announced it sold 3,588 BTC from its corporate treasury, raising approximately $216 million.

The proceeds were used to fund dividend payments under its Digital Credit Capital Framework, according to a Form 8-K filed with the US Securities and Exchange Commission (SEC). The transaction marks the company's first Bitcoin sale under its recently approved BTC Monetization Program and its second redemption this year.

Strategy's Bitcoin sale funds preferred stock dividends

The sales, which took place between June 29 and July 5, saw Strategy offload 1,363 BTC during the first two days of the period, then dispose of another 2,225 BTC between July 1 and July 5.

The proceeds were used to fund dividend payments on its preferred stock series, including STRF, STRE, STRK, STRD and the June monthly dividend for STRC. Strategy also replenished the portion of its USD reserve allocated for those obligations.

Strategy now holds 843,775 BTC following the announcement. The holdings were acquired at a total cost of approximately $63.69 billion, representing an average purchase price of $75,476 per Bitcoin.

The company also maintains a $2.55 billion USD reserve, which is earmarked to support preferred stock dividends and interest payments on outstanding debt.

The sale follows last week's approval of Strategy's BTC Monetization Program, which authorized the company to generate up to $1.25 billion through selective Bitcoin sales.

The proceeds may be used to strengthen the USD reserve, fund preferred stock dividends and debt servicing when doing so is more advantageous than issuing new equity, or finance share repurchases.

Strategy noted that the full $1.25 billion capacity under the monetization program remains available despite the latest transaction. The company also disclosed that it expects to report an $8.32 billion loss on its digital assets for the second quarter, comprising $8.31 billion in unrealized losses and approximately $900,000 in realized losses. As of June 30, Strategy's digital assets had a carrying value of $49.67 billion.

The BTC Monetization Program is part of Strategy's broader Digital Credit Capital Framework, which aims to improve liquidity and strengthen the company's credit profile while maintaining its long-term Bitcoin treasury strategy.

Lacie Zhang, Research Analyst at Bitget Wallet, noted that the sale isn't a surprise to the market, given that the company had previously signaled it could sell portions of its holdings if needed.

“What matters more is that each actual sale weakens the ‘never sell’ perception around the BTC treasury model and brings capital structure pressure back into focus,” Zhang told FXStreet. “So today’s reaction is probably less about the size of the sale itself, and more about the narrative discount that comes from making those sales real.”

Mike McCluskey, Co-Founder of TX, shared a similar view.

“This development interrogates the viability of the 'never sell' corporate treasury playbook. The conviction that supported institutional adoption over the past 24 months is now confronted by the reality of balance sheet pressure,” McCluskey wrote in a note to FXStreet. “As we approach the next earnings cycle, the interrogation of corporate holdings below cost basis will likely intensify. The $60,000 threshold remains the definitive technical and psychological line in the sand, particularly given Strategy’s forced exit at $60,201.”

Bitcoin briefly dropped below $62,000 following Strategy's announcement before recovering to above $63,000 at the time of writing.