Written by Xiao Bing
Last week, Strategy sold 182.6 million common shares, raising $2 billion. It bought not a single Bitcoin.
The allocation of these funds is as follows: $1.36 billion used to repurchase STRC preferred shares, $3 billion added to the existing USD Reserve, and the remaining $15.9 billion deposited into a newly established "USD Cash" pool. As of August 23, Strategy held $6.69 billion in cash, with its Bitcoin holdings unchanged at 840,447 BTC.
This is a company that used to file an 8-K every week announcing bitcoin purchases, and whose founder posted charts every Sunday on X to showcase their holdings. Michael Saylor’s iconic "green square chart" hasn’t been updated in several weeks.
Why was the strategy paused? The core issue is: what kind of company is it becoming?
From Never Selling to the Digital Credit Capital Framework
On May 26, 2026, Strategy sold its first-ever Bitcoin: 32 coins, worth approximately $2.5 million. The quantity was negligible, but the signal was deafening.
The next five sell-offs gradually escalated.
At the end of May: 32 BTC; end of June: 1,363 BTC; early July: 2,225 BTC; end of July: 1,638 BTC; early August: 1,690 BTC. In total, approximately 6,916 BTC were sold throughout 2026, generating around $432 million in cash proceeds.
Except for the first trade, which executed slightly above cost at $77,135, all other trades executed between $60,000 and $64,000, significantly below the average holding cost of $75,385. The realized paper loss exceeds $102 million.
Sell at a loss—it's the bill due date.
On June 29, Strategy officially launched the Digital Credit Capital Framework. The core components of this document include three authorizations: a BTC monetization plan permitting the sale of up to $1.25 billion in Bitcoin; $1 billion in preferred stock repurchase authority and $1 billion in common stock repurchase authority; and a mandatory USD reserve policy requiring reserves to cover at least 12 months of preferred dividend and interest payments.
By August 1, the BTC cashout limit has been increased to $5 billion.
Understand what these numbers mean: Strategy has issued five series of preferred shares (STRK, STRF, STRD, STRE, STRC), with annualized dividend yields ranging from 8% to 12%; combined with over $6.7 billion in convertible bond interest, the company faces approximately $1.76 billion in fixed dollar obligations annually. At the beginning of 2026, the dividend coverage ratio could sustain for more than seven years; by June, CryptoQuant’s calculations showed this figure had shortened to approximately 14 months.
The issue is that Strategy spent $1.38 billion in cash in May to repurchase $1.5 billion face value of 2029 convertible bonds at an 8% discount. While this eliminated debt and boosted the "BTC per share" metric, it directly drained the cash reserves—like a household paying off its mortgage early only to find it can’t cover next month’s bills.
Therefore, starting at the end of June, Strategy’s operational logic underwent a fundamental shift: from a flywheel of "raising capital → buying crypto → announcing increased holdings → stock price rise → raising more capital → buying more crypto" to a balance sheet management approach of "raising capital → building reserves → stabilizing preferred shares → repurchasing STRC → waiting for the right opportunity."
Transformation
On the surface, stopping buying coins looks like giving up. MSTR is down over 60% year-to-date and nearly 80% from its 2024 all-time high. The market is pricing it as a failed leveraged BTC ETF.
But if you shift the perspective from "Bitcoin proxy stocks" to "capital structure engineering," the logic is entirely different.
Saylor’s wording in the Q2 earnings report has subtly shifted. He no longer uses the old narrative that “Bitcoin rises, MSTR must follow.” Instead, he frequently employs the terms “Bitcoin Per Share” and “BTC Yield.”
Since 2026, although Strategy has sold nearly 7,000 BTC, it has maintained a BTC yield of 13.3% by repurchasing STRC shares and managing its equity along the way. In simple terms: while the company’s total BTC holdings have decreased, buying back its own common and preferred shares has increased the amount of BTC per share of MSTR.
The logical model of this operation is more similar to a bank than a fund.
A bank's core capability lies in managing the spread, duration, and liquidity between assets and liabilities; holding amounts is never the focus.
What the strategy is doing is treating Bitcoin as a "reserve asset," MSTR common stock as "equity capital," and preferred stocks such as STRC as "deposit-like liabilities," maintaining a dynamic balance among the three.
$6.69 billion in cash, serving as the "capital adequacy buffer" for the Strategy version.
In a research report on August 22, Bernstein outlined the trigger for reinstating a buy recommendation: STRC returning to near its $100 par value. This preferred stock had dropped as low as $70 in June, reflecting market panic over Strategy’s solvency. Now, STRC has rebounded to approximately $96.5, and its dividend coverage has recovered from 14 months to about 2.8 years, significantly easing balance sheet pressures.
Look at it from another angle: When BTC price was between $60,000 and $64,000, the strategy was forced to make a small sell-off (approximately 0.8% of holdings) to stabilize its capital structure, then held $6.7 billion in cash, 840,000 BTC, and near-zero net leverage as BTC rose to $80,000. If selling at lows is considered "cutting losses," then holding massive cash reserves at highs without buying reflects an extraordinary level of disciplined market timing.
Why doesn't the market care?
An interesting phenomenon to consider: the world’s largest corporate Bitcoin holder reduced its holdings by nearly 7,000 BTC over two consecutive months, yet Bitcoin’s price did not face downward pressure—in fact, it rose from $60,000 to $81,000 during the same period.
This at least indicates two implications: the pricing power in the BTC market has shifted from a single institution to a broader capital structure, and the weekly net inflow of $1.92 billion into spot ETFs is sufficient to fully absorb Strategy's selling pressure.
Meanwhile, the market is pricing in Strategy’s transformation itself: following BTC’s breakout above $80,000, MSTR rose approximately 1.2% on the trading day, without exhibiting the 2–3x leveraged volatility relative to BTC seen in the past. The compression of the premium (mNAV falling from over 3x its historical high to roughly flat) indicates that the market has reclassified MSTR from a "leveraged BTC play" to a company that should be valued using a DCF model.
If Strategy successfully transitions from a "coin hoarder" to a "digital credit issuer," it could become an unprecedented species in the cryptocurrency industry: a "Bitcoin bank."
Unlike exchanges, custodians, or ETF issuers, it uses Bitcoin as its reserve asset, employs multi-layer capital instruments as liabilities, and aims to achieve "BTC appreciation per share," making it more akin to a new type of capital management company.
The risks along this path are equally significant: $1.76 billion in annual fixed expenses mean that for every dollar BTC price falls below the cost basis of $75,385 in a single day, the balance sheet’s safety margin erodes slightly; a $5 billion BTC liquidation authorization indicates the board has prepared for the worst-case scenario.
Saylor no longer posts pictures every Sunday, but his silence may be more worth serious attention than his past shouts.