US-based company Strategy, known for holding the largest Bitcoin reserves among publicly listed firms, has attracted attention after hinting it may sell part of its BTC portfolio. CEO Phong Le indicated in a CNBC interview that Strategy could sell Bitcoin under certain conditions to fund dividend payouts and meet tax obligations. He emphasized that such sales would only occur if they increased the company’s Bitcoin holdings per share from a shareholder perspective.
Reasons driving a potential sale
Phong Le highlighted that the company’s obligations to its Series A Perpetual Stretch Preferred Stock (STRC), which offers an annual 11.5% dividend, may require the sale of some Bitcoin. Part of the proceeds might also be used to defer or balance tax liabilities. However, Le stressed that the overriding criterion would be ensuring any sale has a positive impact on the company’s financial strength.
These discussions gained momentum after Michael Saylor, Strategy’s co-founder, recently stated that periodic Bitcoin sales could be on the table. Saylor’s remarks sparked concerns among Bitcoin investors about the possible effects of such sales on market prices.
Commitment to a strong balance sheet
During a recent earnings call, Michael Saylor stated, “We may sell enough Bitcoin to cover our dividend payments in order to prepare the market and convey that the process is transparent.” Saylor further explained that if Bitcoin appreciates more than 2.3% annually, the company could sustainably cover its dividends using only strategic Bitcoin sales over the long term.
“At this point, we could stop selling MSTR shares and cover dividends solely through Bitcoin sales,” Saylor noted.
The core objective, according to the company, is to ensure dividends are paid without reducing the amount of Bitcoin held per share. Any sale would therefore only occur if it serves the long-term interests of shareholders by increasing the BTC-to-share ratio.
Market impact and reserve size
As of the latest records, Strategy holds 818,334 Bitcoins, cementing its position as the largest holder of BTC among public companies. On the day of the announcement, the total value of these holdings exceeded $66 billion, a figure corroborated by data from BitcoinTreasuries.
Executives at Strategy argue that the annual dividend payouts, even totaling over $1 billion, would not put considerable pressure on the wider Bitcoin market. CEO Phong Le pointed out that Bitcoin’s daily trading volume averages about $60 billion, a scale that could readily absorb these sales.
Phong Le assessed, “Given the daily trading volume, we don’t expect our BTC sales to significantly impact the market.”
Industry experts concur that while sizable corporate Bitcoin sales could exert some short-term downward pressure, market liquidity is likely sufficient to absorb most of the impact.
