Will Companies Stop Accumulating Bitcoin? This Strategy Indicator is a Warning Sign

Strategy sold 3,588 bitcoins for approximately $216 million, using the funds to pay for preferred stock dividends and replenish its cash reserves. The transaction does not signify a withdrawal from Bitcoin but alters the perception of the company, which has long been a symbol of the "buy and hold" strategy. The most pressing question today is not the direction of BTC prices but the sustainability of a model financed by stock issuances, debt, and high-yield preferred securities.

Key Takeaways

• Strategy's sale of Bitcoin is primarily a liquidity operation, but it shows that cryptocurrency has also become a source of funding for current obligations.
• A drop in the mNAV indicator below 1 weakens the mechanism allowing Bitcoin-focused companies to issue shares and allocate the proceeds for further token purchases.
• The issue could affect the entire digital asset treasury sector if lower stock valuations force more companies to sell cryptocurrencies.

Why Did Strategy Sell Part of Its Bitcoins?

Strategy sold 1,363 BTC at the end of June, followed by another 2,225 BTC between July 1 and 5. After the transactions, the company still held 843,775 bitcoins, purchased for a total of $63.7 billion, at an average price of about $75,500 per coin.

The reason for the sale was not a declared change in the long-term approach to Bitcoin, but the need for liquidity management. Strategy allocated the proceeds to payments related to preferred stock and rebuilding its dollar reserves. At the beginning of July, the reserve stood at $2.55 billion, while the expected annual costs for dividends and interest were estimated at around $1.76 billion.

The management adopted a policy of maintaining cash sufficient for at least 12 months of such payments. At the same time, it approved the possibility of raising an additional $1.25 billion through future monetization of Bitcoin if other sources of capital prove less attractive.

Why Does the Drop in mNAV Change the Entire Mechanism?

The treasury company model works best when their shares are valued above the value of the cryptocurrencies they hold. The company can then issue relatively expensive shares, buy additional tokens with the proceeds, and increase the exposure per shareholder.

The problem arises when the market-to-net-asset-value ratio, or mNAV, falls below 1. Issuing shares at a discount to asset value can dilute existing investors, and access to capital becomes more difficult. According to Reuters, the total valuation of DAT companies fell below the value of their cryptocurrencies as early as the end of 2025, while Strategy first fell below this level at the end of June 2026.

Strategy can also utilize preferred securities, but this capital is not free. The annual dividend rate for the STRC instrument was raised to 12%, which is intended to help maintain its price near par value. Such a high payout indicates the significant premium investors expect for financing a structure dependent on the volatile price of Bitcoin.

It should also be noted that a company can have more assets than liabilities while simultaneously facing liquidity issues. Dividends and interest must be paid in dollars, even if Bitcoin remains an attractive long-term asset.

Could Strategy's Sale Trigger a Domino Effect?

The risk is not limited to one company. Strategy has become a model for dozens of companies using stock shares as an indirect way to offer investors exposure to Bitcoin, Ether, and other digital assets. The mechanism of worsening conditions could involve four stages:

• A drop in tokens reduces the value of assets on companies' balance sheets.
• A decline in stock prices decreases the premium over the value of held cryptocurrencies.
• More expensive financing limits the ability for further purchases and increases capital servicing costs.
• Selling assets improves companies' liquidity but simultaneously increases supply in the cryptocurrency market.

Strategy is not the only treasury company selling assets. The Japanese company Nakamoto Inc. sold about 5% of its bitcoins in March and then about 600 BTC in June. If similar decisions become widespread, the market could enter a negative feedback loop between token prices and the condition of companies accumulating Bitcoin.

Is Strategy Really Under Pressure?

The sale of Bitcoin does not yet appear to be a forced liquidation. In the following week, Strategy did not reduce its BTC holdings but raised $466.7 million through the issuance of common shares, increasing its cash reserves to about $3 billion.

The company also previously repurchased convertible bonds with a nominal value of $1.5 billion for about $1.38 billion, reducing the value of such liabilities from $8.2 billion to $6.7 billion. This shows that Strategy still has access to many balance sheet management tools, and selling BTC is one of them, not the only available option.

However, the main test will be the company's behavior during the next significant Bitcoin price drop. Investors should monitor the mNAV level, upcoming share issuances, the interest rate on preferred securities, and the number of months of dividend and interest coverage by the dollar reserve. Further BTC sales would not necessarily indicate capitulation but would show that the cryptocurrency treasury increasingly serves as a safeguard for an expanded financial structure.