Strategy says it will no longer allocate all new capital to Bitcoin purchases and may sell BTC when needed, major shift in its corporate treasury strategy.
Strategy, formerly known as MicroStrategy, is changing the Bitcoin playbook that made it the world's largest corporate holder of the cryptocurrency. During its second quarter earnings call, the company said it will no longer direct every dollar of newly raised capital toward buying Bitcoin.
Instead, it plans to balance future fundraising between expanding its BTC holdings and strengthening its U.S. dollar reserves.
For nearly six years, Strategy followed a simple formula: raise capital and buy more Bitcoin. That approach helped the company accumulate 843,775 BTC, acquired at a total cost of $63.69 billion and an average purchase price of $75,476 per coin.
Now, management says that strategy is evolving. Going forward, proceeds from future capital raises will be split dynamically between Bitcoin purchases and cash reserves, depending on market conditions.
The company also confirmed that it may sell Bitcoin when necessary to pile up its U.S. dollar reserves, fund preferred stock dividends, pay interest expenses, and support share repurchases.
The company also said it will not use Bitcoin-backed loans because they can lead to margin calls and create risks with lenders.
The change comes as Strategy faces growing financial obligations after years of funding Bitcoin purchases through stock sales, debt, and preferred share offerings.
One major payment is linked to STRC, a preferred stock that currently pays a 12% annual dividend. Strategy needs enough cash to make these payments even when Bitcoin prices fall.
Instead of relying entirely on future fundraising, Strategy has spent recent months building a $3.75 billion U.S. dollar reserve. According to management, that cash balance is enough to cover preferred dividends and interest payments for more than 2.1 years.
The company has also begun using capital to reduce liabilities instead of simply buying more Bitcoin.
At the same time, Strategy has already sold about $218.4 million worth of Bitcoin under what it calls its Bitcoin Monetization Program, using part of the proceeds to support corporate obligations.
Strategy’s latest move has raised concerns among investors, with Bitcoin falling 1.3% to around $63,763 at the time. The company has now gone three straight weeks without buying more Bitcoin, leaving its holdings unchanged at 843,775 BTC.
Instead of adding to its Bitcoin holdings, Strategy raised $544.5 million by selling 5.42 million Class A shares. The company plans to keep that money as cash rather than use it for new Bitcoin purchases.
However, this does not mean Strategy is turning bearish on Bitcoin. The move suggests the company is taking a more balanced approach, keeping more cash available while continuing to hold its large Bitcoin reserve.
Because Strategy was one of the first public companies to build a large Bitcoin reserve, other companies closely watch its moves.
This does not mean other companies will start selling Bitcoin. Instead, Strategy's approach could encourage companies to keep more cash available to meet regular financial obligations.
Meanwhile, Crypto analyst Ted Pillows questioned why Strategy would slow its Bitcoin purchases while Bitcoin is still below its all-time high. He said lower prices can often give investors a chance to buy more.
Despite those concerns, Strategy insists Bitcoin remains central to its business. The difference is that future capital will no longer flow automatically into BTC.
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