Strategy Halts Bitcoin Purchases as Cash Reserve Climbs to $3 Billion

Strategy (MSTR) has not purchased any Bitcoin since June 22, when it acquired 520 BTC for about $35 million. The company has instead shifted its near-term focus to liquidity, building its U.S. dollar reserve to $3 billion as of July 12 through a combination of Bitcoin sales and stock issuance.

Two Bitcoin Sales, Then a Pause

During the week ending July 5, Strategy sold 3,588 BTC across two transactions: 1,363 BTC for approximately $80.8 million on June 30, followed by 2,225 BTC for $135.2 million. The sales generated roughly $216 million and reduced the company’s holdings to 843,775 BTC, where they have remained unchanged for two consecutive weeks, according to an SEC filing and a statement from Executive Chairman Michael Saylor.

The company said proceeds from those sales would help fund distributions on its preferred stock and replenish the portion of its dollar reserve used for those payments, which stood at approximately $2.55 billion immediately after the sales.

Reserve Reaches $3 Billion Through Stock Sales, Not Additional Bitcoin

Strategy’s dollar reserve rose to $3 billion in the following week, but the increase came from equity issuance rather than further Bitcoin sales. According to a Form 8-K filed with the Securities and Exchange Commission on July 13, the company sold 4,818,781 Class A common shares between July 6 and July 12 through its at-the-market program, generating $466.7 million in net proceeds. Roughly $450 million of that was added to the dollar reserve. The company made no Bitcoin purchases or sales during that same week.

Based on annualized preferred-stock dividends and debt interest of roughly $1.76 billion, the $3 billion reserve now provides about 20.4 months of coverage. Strategy’s total Bitcoin holdings carry an aggregate acquisition cost of about $63.69 billion, or an average of $75,476 per coin including fees, implying roughly $10.7 billion in unrealized losses at current prices near $63,000.

Analysts Split on What the Shift Signals

The pivot away from Strategy’s long-standing “never sell Bitcoin” posture has drawn mixed reactions. Peter Schiff, an economist and longtime Bitcoin critic, said the company has “needlessly destroyed shareholder value.”

Standard Chartered took a more measured view, reaffirming its year-end Bitcoin price target of $100,000 and framing Strategy’s shift toward using Bitcoin as collateral for its preferred stock as a communication issue rather than a solvency concern. VanEck’s Matthew Sigel noted that the 3,588 BTC sold in late June and early July was not deducted from the allowance under Strategy’s Bitcoin monetization program, which permits selling up to $1.25 billion of Bitcoin to fund dividends, suggesting the company’s actual capacity to raise cash from its holdings may exceed that figure.

Reserve Coverage Faces Uncertainty

If Bitcoin falls further and sets new lows, the $3 billion reserve may not be enough. That could force Strategy to raise additional funds or sell more Bitcoin, pressuring both STRC and MSTR shares further. Bitcoin’s historical four-year cycle has led some market watchers to note that cyclical lows have previously arrived in October, though no such pattern is confirmed for this cycle.

STRC, Strategy’s Stretch preferred stock, traded around $87 on Monday, down about 0.5% for the day but up from a late-June low near $70. Its continued discount to the $100 stated value indicates investors are demanding a higher yield to compensate for Bitcoin-related and liquidity risk. Separately, MSTR’s enterprise multiple to net asset value stood at approximately 1.02 to 1.03, meaning shares trade only slightly above the value of the company’s underlying assets, which could limit room for accretive equity financing if the bear market persists.