Strategy, once a fervent opponent to selling any of its Bitcoin, had to sell Bitcoin at a steep loss.
💸 Diamond Hands Meet Reality
- Strategy posted an eye-watering $8.3 billion second-quarter loss on its digital assets after selling part of its Bitcoin stash below its purchase price. For a company famous for preaching "never sell," that's quite the plot twist.
- The former MicroStrategy sold 3,588 Bitcoin for roughly $216 million, with 1,363 coins sold at an average of $59,256 and another 2,225 at $60,773.
- The painful part? Strategy's remaining Bitcoin was acquired at an average cost of $75,476 per coin. Selling below that level locks in a loss rather than simply watching one on paper.
📉 Why Sell at a Loss?
- The sales were supposed to free up some cash flow. Strategy used the proceeds to pay preferred-stock dividends and rebuild part of its US dollar reserve.
- The company is operating under a turnaround plan allowing it to sell up to $1.25 billion worth of Bitcoin to cover dividends, debt interest, and share repurchases. In other words, Bitcoin has become a funding source as well as a long-term investment.
- Despite the sales, Strategy still holds a staggering 843,775 Bitcoin, making it by far the world's largest corporate Bitcoin owner. Its US dollar reserve stood at $2.55 billion as of Sunday.
📈 Stock Shakes, Bitcoin Steadies
- Strategy shares initially dropped 4.5% after the opening bell Monday before clawing back the losses to finish slightly higher.
- The stock has still lost roughly one-third of its value this year, , tracking a brutal stretch for Bitcoin itself.
- The cryptocurrency remains about 50% below its peak, as it rebounded toward $63,700 after briefly slipping near $61,000.
- Investors now face an uncomfortable question: if Bitcoin stays under pressure, will Strategy need to sell even more of its holdings?
- For years the company was the market's biggest accumulator. Now traders are watching to see whether it has become a reluctant distributor instead.