Summary
- Strategy's move to eliminate $1.5 billion in debt and acquire 24,869 BTC depleted its cash reserves just before a monthly dividend payment.
- The company's sale of $2.5 million worth of BTC contradicted its "never sell" philosophy, causing fears of market instability and resulting in $1.76 billion in liquidations across the crypto sector.
- While some critics see the timing as a strategic mistake, others believe institutional investors perceive it as manageable leverage rather than a fatal issue.
Bitcoin has begun June on a volatile note, experiencing a decline of approximately 10% from $74,000 to $65,400 as various challenges emerge. The focus remains on the implications of Strategy’s first BTC sale since 2022.
The Bitcoin treasury firm disclosed in an 8-K filing on Monday that it had sold 32 BTC the previous week, igniting a lively discussion on crypto Twitter.
This action marked a significant departure from Strategy's previously unwavering “never sell” approach, with the firm's Chair, Michael Saylor, hinting at this change last month during an earnings call, stating, “we will probably sell some Bitcoin to pay a dividend just to inoculate the market and send the message that we did it.”
Following this announcement, Bitcoin's price sharply declined, eventually falling below $66,000 as negative pressures increased, leading to $1.76 billion in liquidations of leveraged positions in the crypto market on June 2, according to CoinGlass data.
A “Structural Crack”
Critics argue that this decision reflects structural challenges in how Strategy intends to meet its dividend commitments, undermining the longstanding "never sell" narrative accompanying its Bitcoin strategy.
The situation hinges on a few recent developments: the sale of 32 BTC and Saylor's choice to utilize the company's $1.38 billion in cash reserves to retire $1.5 billion of its 2029 convertible bonds.
During the same timeframe, Strategy acquired 24,869 BTC using funds from its $2 billion STRC offering, which drained its corporate cash reserves. Critics view this as a poor tactical decision, especially with an expensive monthly dividend payment imminent for STRC holders.
“It's tragicomic how poorly Saylor's recent actions have played out,” tweeted crypto economist Alex Kruger on Tuesday. “He attempted to rescue STRC by indicating a willingness to sell Bitcoin, but it all fell apart as a result.” Kruger suggested that Strategy was “cornered” and that Saylor “should have sold a larger amount if he was going to sell.”
It’s tragicomic how bad Saylor's recent moves have been. Both buying back the converts and the 32BTC sell. He tried to save STRC by signaling willingness to sell BTC, and cratered it all in the process. And he's still cornered. Should have sold size if he was going to sell. https://t.co/Stmcze0GCM
— Alex Krüger (@krugermacro) June 2, 2026
In conjunction with the downturn in the crypto market, STRC, the company's preferred perpetual stock, fell from its $100 par value to $94.84, where it currently trades. Strategy's common stock MSTR dropped 9.6% from its opening price on Monday to $134, followed by an additional 4% decline on Wednesday to $130, according to Yahoo! Finance.
According to Ryan Yoon, a senior analyst at Tiger Research, STRC's depegging "signals a structural crack in MSTR’s leverage-heavy Bitcoin flywheel." He explained, “Faced with substantial dividend obligations, hedge funds feared Michael Saylor might have to liquidate some Bitcoin to meet debt payments. This shattered the 'never sell' narrative, exerting immediate downward pressure on Bitcoin.”
However, not everyone sees this as a sign of structural failure. Andri Fauzan Adziima, research lead at Bitrue Research Institute, shared with Decrypt that Saylor's actions were fundamentally sound balance-sheet decisions that were merely poorly timed amid a sensitive macro market downturn.
Adziima noted that STRC's drop to the $95–97 range "increases the cost of preferred funding, compresses the mNAV premium, and slows the Bitcoin yield engine,” suggesting that this situation could lead the company to pursue further equity issuance or potential Bitcoin sales to cover dividends. Nonetheless, he pointed out that many institutional investors view it as “navigable leverage friction rather than a death spiral.”
The effectiveness of Strategy's attempt to "inoculate" the market remains uncertain. While Yoon believes the maneuver damaged investor confidence, Adziima contends the market is facing a temporary setback instead of a significant collapse, predicting stabilization between $65,000 and $68,000 once the immediate turmoil subsides.
Paul Howard, director at cryptocurrency market maker Wincent, concurred that the current friction does not indicate a long-term decline in crypto; however, it could diminish Strategy's market share.
“The mentioned factors suggest a likely decrease in MSTR’s dominance,” Howard told Decrypt, emphasizing that the rise of various institutional products and derivatives means investors no longer depend solely on MSTR for exposure. For future developments, Howard observed that while “rumors of further selling from Saylor or Mt. Gox distributions” could exert downward pressure, advancements in regulation like the U.S. Clarity Act could act as a positive catalyst.
To replenish its USD reserves and avoid substantial Bitcoin sales, Adziima anticipates that Strategy’s next steps will likely involve targeted MSTR equity raises combined with adjustments to STRC dividends, such as shifting to semi-monthly payments.
Bitcoin is currently priced at around $65,560, reflecting a 3.1% decrease in the last 24 hours, according to CoinGecko data. Users on the prediction market Myriad, which is part of Decrypt’s parent company Dastan, have turned bearish on Bitcoin’s prospects, now estimating a 58% likelihood of BTC's next movement leading it to $55,000.
Investor sentiment in the crypto space remains low as traditional stocks and certain altcoins rise while Bitcoin continues to fall. This correction is aggravated by the ongoing U.S.-Iran conflict and its subsequent effects—including rising energy prices and inflation—that have compelled macroeconomic policy to maintain higher interest rates for an extended period, dampening risk appetites.
Decrypt has reached out to Strategy for further comments.