Strategy sells $216 million in bitcoin in its biggest disposal

Strategy sold $216 million of bitcoin over the past week, marking the largest crypto disposal in the company’s history, according to a Monday announcement by the company and its own transaction catalog. The sale matters because Strategy, led by executive chairman Michael Saylor, built its market identity around buying and holding bitcoin rather than selling it.

After the announcement, Strategy shares dropped nearly 5% at the market open before recovering somewhat to trade around $100, Fortune reported. Bitcoin slipped nearly 1% in the first hour after the news and later moved back above $62,000, according to CoinGecko data cited by Fortune.

The sale followed Strategy’s late-June disclosure that it could sell as much as $1.25 billion of bitcoin to increase cash reserves and avoid issuing additional equity, according to Fortune. The company also sold 32 bitcoin in June, worth about $2.5 million at the time, Fortune reported.

Strategy has said limited bitcoin sales could help strengthen its cash position and reassure investors, according to Fortune. That stance contrasts with Saylor’s public advocacy for long-term bitcoin holding; in October, he wrote on X that investors should not sell their bitcoin.

A sharp turn for a bitcoin-heavy company

Saylor began putting bitcoin on Strategy’s balance sheet in 2020, when the company was still known as MicroStrategy, Fortune reported. The company, originally a data software business, has since become one of the most prominent public-market vehicles tied to bitcoin.

Strategy’s bitcoin holdings have grown to roughly $52 billion, equal to about 4% of the total bitcoin supply, according to company data cited by Fortune. The latest sale is the biggest liquidation recorded in Strategy’s six-year bitcoin accumulation program, according to the company’s transaction catalog.

The pressure on Strategy has increased during a broader crypto downturn, Fortune reported. On Oct. 10, more than $19 billion in leveraged crypto positions were wiped out in one of the largest liquidation events in the industry’s history, according to Fortune.

Since that event, bitcoin has fallen more than 43%, while Strategy’s stock has dropped more than 37%, Fortune reported. Those declines have put strain on companies that tied their valuations closely to digital-asset holdings.

Preferred stock trades below target

Strategy’s STRC preferred stock, which the company calls “Stretch,” has also come under pressure, Fortune reported. The security was designed as a perpetual preferred stock with a biweekly dividend, and Saylor has promoted it as a stable product for investors, according to Fortune.

Strategy has used proceeds from STRC sales to fund bitcoin purchases or pay interest to creditors, Fortune reported. On Monday, STRC traded at $89, below its $100 target level, according to Fortune.

Other public companies that adopted crypto-heavy treasury strategies have also struggled as investor demand weakened, Fortune reported. Solana-focused Solmate has lost nearly all its value, according to the Financial Times, while Cantor Fitzgerald’s BSTR bitcoin vehicle has worked to keep a SPAC deal alive as crypto prices slid, according to Bloomberg reporting cited by Fortune.

This story draws on original reporting from Fortune.