Strategy expands Bitcoin sales plan after quarterly loss of $8.2 billion

TLDR: Strategy Bitcoin sales framework sets a $5 billion cap

STRC support and cash reserves affect next steps

Strategy's total bitcoin sales could be as high as $5 billion, covering reserve funds, annual dividend and interest costs, and securities repurchase programs.

The company reported a net loss of $8.22 billion for the second quarter, of which a loss on digital assets of $8.32 billion reflected a lower valuation of Bitcoin at the end of the quarter. The company holds 843,775 bitcoins at an average cost of close to US$75,476, which is less than the total purchase cost at current prices. Management prioritizes STRC price support, cash reserves and debt flexibility rather than investing every new financing in Bitcoin.

After reporting a second-quarter loss, Michael Siler's Strategies firm opened the door for further sales of Bitcoin. The proposed Bitcoin sales framework could release up to $5 billion for liquidity, dividends, interest and securities buybacks. However, management has not committed to selling the entire amount. That figure is a cap for multiple capital plans, not a planned transaction.

The company lost a net quarterly loss of $8.22 billion, compared with a profit of $10.02 billion a year earlier. The filing also showed that digital assets lost $8.32 billion. The lower value of Bitcoin at the end of the quarter was the main reason for the loss that was particularly volatile in the quarter. The company currently holds 843,775 bitcoins, having previously sold small holdings during 2026. The cost of these bitcoins is approximately US$63.69 billion, with an average of approximately US$75,476 each. Bitcoin is trading at close to $63,047, keeping its holdings below the total purchase cost.

MSTR shares were also close to $93.28, down 4.56% in the most recent trading session.

Strategy Bitcoin sales framework sets a $5 billion cap

Strategy's capital framework divides potential Bitcoin monetization into three uses. Management can use up to US$1.25 billion for its dollar reserves. An additional $1.76 billion could be used to pay annual preferred stock dividends and interest on debt. The company also has the right to make up to $2 billion in common stock and digital credit repurchases. Together, these plans make up a total capacity of US$5 billion.

This structure does not mean Strategy will sell $5 billion in Bitcoin. CEO Feng Le described the number as a maximum based on current plans and market demand. Actual sales may be below this level. Michael Siler also said management wanted flexibility when Bitcoin sales could bring better results than equity issuance.

Strategy's Bitcoin sales have gone from theory to reality. The company sold 3,588 bitcoins at the end of the quarter and early July. These transactions reduced holdings from 847,363 bitcoins to 843,775 bitcoins. Based on filing details, Strategy received approximately $216 million from the two disclosed transactions. The company uses bitcoin monetization to support dividends and liquidity rather than to purchase new assets.

This shift marks a change in strategy's previous position of only accumulating. Despite this, management still describes Bitcoin as its core reserve asset. The company can combine Bitcoin sales, common stock issuance, preferred stock issuance and cash reserves. This approach provides strategy companies with more options when MSTR trading prices are close to net asset value.

STRC Support and Cash Reserves Impact on Next Steps

STRC Preferred Shares have become a core part of the company's capital plan. Management hopes the security will recover to its prescribed face value of $100. Buying back STRC shares traded at a discount can reduce future dividend costs while boosting market confidence. Strategy firm Bitcoin Sales can provide funding when issuing new shares would cause excessive dilution. The company ended the quarter with $3.75 billion in U.S. dollar reserves. Management said the balance was sufficient to cover more than 2.1 years of preferred stock dividends and debt interest. Strategy also bought back $1.5 billion in notes at a discount, reducing convertible debt to approximately $6.71 billion. The company's earlier disclosures confirmed debt reduction and a broader approach to capital management.

Recent research reports remain constructive about strategy companies despite Bitcoin's volatility. TD Cowen maintained its buy rating but lowered its target price to $260. Benchmark maintained its buy rating and a $570 price target at the end of July. The agency said the larger reserves increase dividend flexibility and support future Bitcoin purchases, while not abandoning Strategy's long-term plans.

Strategy has not yet included bitcoin-backed borrowing in active review. Management mentioned counterparty risk and margin risk of this financing channel. Strategy's Bitcoin sales will depend on Bitcoin prices, STRC trading levels, reserve needs, repurchase opportunities, and investor needs. Management will also evaluate whether each transaction will increase the amount of Bitcoin held per share by ordinary investors over time.