Strategy’s $216M Bitcoin Sale Didn’t Tank BTC, Grayscale Sees Bottom

Strategy sold $216 million in Bitcoin during the week ended July 5 and the market shrugged. BTC slipped to a Monday low of $61,246 after the regulatory disclosure, then closed the day up 0.6% on a rebound to roughly $64,000.

Grayscale reads that absence of a crash as Bitcoin finding a bottom. JPMorgan and Peter Schiff aren’t buying it.

The $216M Disclosure and the Reaction That Didn’t Come

Strategy disclosed the sale in a regulatory filing on Monday July 6, the first execution under a newly announced Bitcoin monetization program. The 3,588 BTC sold between June 29 and July 5 came in two tranches. Strategy sold 1,363 BTC for $80.8 million at an average price of $59,256 between June 29 and 30, then 2,225 BTC for $135.2 million at an average of $60,773 between July 1 and 5, per the disclosure breakdown published after the filing.

Bitcoin’s initial reaction followed the playbook: a drop to $61,246 within hours of the Monday filing, then a rebound toward $64,000. By the close, BTC was up 0.6%.

The disclosure came as Strategy had also set out fresh Bitcoin deployment plans that left the funding model under acute scrutiny. The sale proceeds are earmarked for the company’s preferred dividend obligations, including the STRF, STRE, STRK, STRD and STRC preferred shares, which together carry a dividend burden of roughly $1.2 billion a year. After the transaction Strategy held 843,775 BTC, more than 4% of Bitcoin’s 21 million supply cap, plus about $2.55 billion in dollar reserves. That cash position now covers roughly 17 months of preferred dividend payments.

STRC’s Rebound Says More Than BTC’s Did

Grayscale’s preferred way into Strategy this week was through its preferred shares. STRC, the variable-rate preferred paying a dividend near 12%, did most of the talking. The shares had de-pegged from their $100 par value in mid-June as doubts grew about whether the dividend was sustainable. They fell to a record low around $71 on June 26. After Monday’s disclosure STRC briefly climbed above $90 for the first time since June 22, jumping about 26% off that record low within days.

The rebound in the price of STRC suggests investors are now more confident about the instrument. Strategy is selling more Bitcoin. But this will restore confidence in its financing structure and help Bitcoin find a more durable bottom, in our view.

Zach Pandl, Grayscale’s head of research, wrote the line in a research note released after the filing. He separately argued that the willingness to sell bitcoin as needed for dollar reserves reduces short-term tail risk, and that he expects STRC to continue to trade well.

Galaxy’s analysts saw the same move from a different angle. STRC jumped from around $71 to $90 while common shares MSTR rallied from $82.5 to $100 over the same window. Galaxy framed the rebound as the market liking the new plan, but the broader read on the next stop came with conditions: the prior STRC stress test at the $60,000 Bitcoin level showed how quickly the float-rate dividend arithmetic can flip on a price slide.

Why the Bear Case Still Has Traction

Economist and gold advocate Peter Schiff estimates the company took a $15,000-per-Bitcoin loss on this disposal. Per Schiff’s calculation on the 3,588 BTC sold, that works out to about $54 million in realized losses. Over 840,000 BTC remain on the balance sheet and, Schiff argues, room for “much greater” total losses if more sales follow at the same average.

Galaxy’s head of research Alex Thorn said the monetization plan is “a smart move” but warned it “may not resolve structural issues forever.” The company still has “a large preferred stack” and “large recurring obligations,” Thorn wrote, with $6.7 billion in convertibles due in the next two years. Per Galaxy’s structural-issues flag on the monetization plan, selling more BTC would “effectively exacerbate MSTR and STRC weakness.” JPMorgan, for its part, warned in a July 2 note that the dual-track buy-and-sell posture creates “two-way” flow risk and that 17 months of dividend coverage isn’t enough; the bank recommends 24 to 36 months of coverage, funded by issuing MSTR shares rather than more Bitcoin sales.

The dispute comes down to whether the financing structure was the problem or whether the floating dividend was. Schiff and Galaxy see recurring obligations as an open liability. Grayscale sees Strategy’s willingness to sell as a sign those obligations are now funded rather than fended off. The two views don’t rule each other out: rebuilding a cash buffer helps both sides, but only if BTC’s price doesn’t force the next sale.

What 3,588 BTC Did That 32 Couldn’t

Back on May 31, Strategy disclosed a sale of 32 BTC. That news drove BTC down more than 20% to around $59,000 in the first week of June. The disclosure this week covered 3,588 BTC, more than 110 times the May amount, and barely moved the market. The contrast shows how much the framing shifted inside a month. In late May, any sale was read as an existential break with the buy-and-hold model. In early July, the same kind of disclosure was read as a funding move, not a betrayal.

Blockchain analytics analyst James Van Straten framed the muted reaction in a single line: “When bad news no longer pushes prices lower, the bottom may be in.” That is a heuristic rather than a forecast, but on the surface BTC just failed to act bearishly on its largest corporate seller turning distributor. The data the market actually had was identical in both events: an SEC filing, a number, a price band. What changed was the lens.

Strategy’s Balance Sheet After the Monetization

The transaction rebuilt Strategy’s dollar reserve to about $2.55 billion from under $1 billion in late May. Per Grayscale’s read of the disclosure, the company now holds 843,775 BTC acquired at an average cost of about $74,476 per coin, with paper losses of around $11.4 billion at recent prices. Strategy still owns more than 4% of all Bitcoin that will ever exist, and its preferred dividend burden runs roughly $1.2 billion a year across the five preferred series.

• BTC held after the sale: 843,775 (more than 4% of the 21 million supply cap)
• Average cost basis: about $74,476 per coin
• Paper loss at recent prices: about $11.4 billion
• Cash reserve after the sale: about $2.55 billion (vs. under $1 billion in late May)
• Preferred dividend coverage: roughly 17 months at current reserve; JPMorgan recommends 24 to 36 months

The dollar figure is the cleanest read on what the program bought. The monetization framework permits up to $1.25 billion in further BTC sales to build reserves, fund preferred dividends, or support share repurchases. The $216 million sale is the first slice of that envelope. Whether the next disclosure day looks like May 31 or July 6 will set the read on the rest of the program.

FOMC Minutes and the Bottom Call

The market had been telling Strategy what a financing squeeze looks like. Bitcoin’s pre-sale reaction had been telling the market what a forced seller looks like. BTC fell in late May and early June in part because the 32 BTC disclosure landed alongside broader repricing of Federal Reserve interest-rate expectations, per JPMorgan. The new disclosure lowers the immediate forced-sale risk by rebuilding the dollar reserve. This Wednesday’s FOMC meeting minutes, due today, sit on top of the disclosure window. That is the next test.

The bottom case is a single conditional: that when bad news stops pushing prices lower, a bottom has formed. That doesn’t mean the structural objections from Schiff, Galaxy or JPMorgan go away. JPMorgan’s own note allowed that current bearish sentiment “could ultimately prove a contrarian bullish signal,” tied to reserves and pending crypto market structure legislation. For the call to hold, BTC has to absorb this FOMC and whatever comes out of the disclosure stream next without revisiting that Monday low of $61,246. The Fed minutes due today are the next test of the bottom call.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry significant risk, including the loss of principal. Readers should consult a qualified financial professional before making any investment decision. Figures cited are accurate as of the publication date.