PiCK
Strategy Formally Raises Prospect of Bitcoin Sales; Analysts Warn of Drop Below $40,000
Summary
- Strategy, the world’s largest corporate holder of Bitcoin, formally disclosed in an SEC filing that it may consider a Bitcoin sale to help finance about $1.5 billion in debt repurchases.
- Chairman Michael Saylor said the company may sell some Bitcoin to fund dividend payments and is considering a structure in which it buys with credit and then sells after the asset rises in value to pay dividends.
- Some analysts said that if Strategy’s large-scale and sustained selling becomes reality, it could trigger market fear and raise the possibility of Bitcoin falling below $40,000.
Forecast Trend Report by Period
Strategy, the world’s largest corporate holder of Bitcoin, has formally raised the possibility of selling some of its holdings to help fund dividend payments and other financing needs. Some analysts say a large-scale sale by the company could send Bitcoin sharply lower.
Forbes reported on May 16 that Strategy, in a recent filing with the US Securities and Exchange Commission, cited Bitcoin sales as one option for funding about $1.5 billion of debt repurchases. The company said it could draw on cash on hand, proceeds from its stock issuance program and funds generated by selling Bitcoin.
Strategy has aggressively accumulated Bitcoin since 2020 through large convertible debt offerings and stock sales. Its holdings are currently valued at about $63 billion. More recently, the company has sought fresh funding by launching STRC, a preferred stock product built around monthly dividend payments.
Chairman Michael Saylor said during the company’s first-quarter earnings release earlier in May that Strategy could sell some Bitcoin to pay dividends. He described the comments as an effort to signal that possibility to the market in advance. The company is considering a structure in which it buys Bitcoin with credit and then sells part of its holdings after the asset rises in value to fund dividend payments.
Investors are also focusing on the shift in Strategy’s stance. The company had long emphasized what was effectively a permanent holding strategy, often described as “diamond hands.” Thomas Perfumo, Kraken’s chief economist, said Strategy remains one of the market’s most influential institutions. The key change, he added, is that the company has now formally acknowledged the possibility of selling Bitcoin.
Some analysts say any actual sale would inevitably hit the market. Shawn Young, chief analyst at MEXC Research, said Strategy holds enough Bitcoin to trigger market fear. If large-scale, sustained selling becomes reality, Bitcoin could fall below $40,000, he said.
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