Strategy Sells Another $109M in Bitcoin as Cash Reserves Take Priority

Strategy has sold another batch of Bitcoin as the company continues to prioritize building a large cash reserve over adding to its cryptocurrency holdings.

The Bitcoin treasury firm disclosed Monday that it sold 1,690 BTC for approximately $108.6 million. Following the transaction, Strategy’s Bitcoin holdings fell to 840,447 BTC, down from 842,138 BTC previously.

Rather than putting the proceeds back into Bitcoin, the company used roughly $109 million to repurchase 1,152,020 shares of its STRC preferred stock. The buyback comes after STRC traded well below its $100 stated value in June.

Strategy said its USD Reserve now stands at $4.65 billion, following a $650 million increase. The company also said the reserve’s duration rose to 2.7 years, while its Bitcoin credit spread for STRC narrowed by 10 basis points.

The latest sale marks another step away from Strategy’s aggressive Bitcoin accumulation strategy. The company has not purchased additional Bitcoin since June, despite repeatedly describing itself as a long-term holder of the asset.

Strategy began building its Bitcoin treasury in August 2020, when it was still known as MicroStrategy. The move transformed the software company into the largest corporate Bitcoin holder and inspired a growing number of firms to adopt similar treasury strategies.

The company has now spent more than $63.5 billion acquiring Bitcoin. Its latest sale, however, shows that management is willing to tap its Bitcoin holdings when it wants to strengthen liquidity or support other parts of its capital structure.

The change comes during a difficult period for both Bitcoin and Strategy shares. Bitcoin is trading nearly 50% below its record high reached in October, while MSTR has fallen almost 80% from its own peak.

Strategy shares were down close to 3% on Monday as investors continued to assess the company's exposure to Bitcoin's price swings. MSTR has long been viewed as a way for investors to gain amplified exposure to Bitcoin, making the stock particularly sensitive to movements in the cryptocurrency.

Despite the recent sales, Strategy has maintained that its broader Bitcoin strategy remains intact. CEO Phong Le has said the company is not concerned about the current bear market and intends to remain a long-term Bitcoin buyer.

For now, though, the company is putting more emphasis on liquidity. With $4.65 billion in its USD Reserve, Strategy is giving itself a larger financial cushion while waiting for conditions in the Bitcoin market to improve.