Strategy, the entity formerly publicly known as MicroStrategy, continues to liquidate its asset reserves into the market. For four consecutive weeks, the company has been selling Bitcoin. In the latest round of sales, they disposed of 1,637 BTC worth $218 million, specifically to cover preferred stock dividend payment obligations.
This move immediately dragged their holdings down to 842,138 BTC and triggered a realized loss of $102 million. The fact that the value of the sales driven by these dividend obligations exceeded the proceeds confirms one thing: some of the liquidated Bitcoin was purchased above the current spot price level.
The End of the Permanent Hold Promise
Since 2020, Strategy has aggressively accumulated more than 843,000 BTC. They funded this massive accumulation through a combination of debt instruments, including the issuance of $7 billion in convertible bonds, preferred stock, and ATM equity offerings.
During that accumulation phase, founder Michael Saylor repeatedly emphasized one core principle: Bitcoin is a ‘permanent hold’ asset. He promised investors that the company’s crypto holdings would never be sold simply to cover operational expenses. The consecutive sales to fund dividend payments this month officially break the narrative that had been built over five years.
Responding to this strategic shift, CEO Phong Le repositioned the company’s role. He now refers to Strategy as a ‘Bitcoin central bank.’ This new analogy carries a logical implication that legitimizes their sales - any central bank occasionally needs to release part of its monetary reserves when financial conditions demand it.
Effects of New Accounting Rules and Market Buying Power
In addition to the asset liquidation, Strategy’s quarterly financial report revealed an $8.2 billion write-down on digital assets. This book loss expense is in response to the fair value rules from the Financial Accounting Standards Board (FASB), scheduled to take effect starting January 2025.
Once this rule becomes active, all digital asset portfolio write-downs will flow directly into the company’s income statement. This change in accounting standards demands serious attention, as Bitcoin’s price volatility recorded directly on the income statement could reduce the appeal of Strategy’s stock to potential institutional investors.
However, amid the sell-off carried out by Strategy, the market has proven to remain calm. The array of spot Bitcoin ETFs currently in circulation successfully absorbed the overflow of supply from the company without triggering negative effects on the market price. These traditional investment instruments continue to demonstrate massive capital absorption capacity, as evidenced by the total assets under management of spot ETFs now surpassing $62 billion.
Ultimately, the softening of Strategy’s principles proves that no matter how resilient a crypto narrative is, it must still face real-world financial obligations. The Bitcoin reserves that were once claimed to be eternal have proven to be liquid when corporate dividend obligations begin to mature.
Reported from crypto.news.
Read also: What Is Bitcoin Halving?
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
