"Buy and hold" coming to an end? Why does Strategy say to sell Bitcoin?

Cao Zhu, Golden Finance

Summary

On May 6, 2026, Strategy reported a net loss of $12.54 billion in the first quarter of 2026. Executive Chairman Michael Saylor proposed the possibility of selling Bitcoin to pay dividends, marking a shift from the previously stated strategy of never selling Bitcoin.

1. Why does Strategy say it will sell Bitcoin?

On May 5, Strategy announced its financial results for the first quarter of 2026, which were not optimistic, mainly due to a sharp decline in Bitcoin prices at the beginning of the year.

According to financial reports, Strategy’s net loss in Q1 2026 was $12.54 billion, with a diluted loss of $38.25 per common share, compared to a net loss of $4.22 billion and a diluted loss of $16.49 per common share in Q1 2025. The net loss attributable to common shareholders in Q1 2026 was $12.77 billion, versus $4.23 billion in Q1 2025.

As of 2026, Strategy’s Bitcoin holdings reached 818,334 coins, a 22% increase year-over-year; this year, Bitcoin returns have reached 9.4%; and $11.68 billion has been raised so far this year.

Strategy also emphasized that since the beginning of the year, its Bitcoin return has been about 9%. This metric measures the growth per share of Bitcoin—that is, the ratio of the amount of cryptocurrency held by the company relative to its stock over time. Bitcoin return measures Strategy’s efficiency in converting capital into Bitcoin exposure for shareholders.

During the earnings call on May 5, Michael Saylor compared Strategy to a real estate development company, stating: “If you buy land at $10k per acre and sell it at $100k per acre, then use the profits to buy more land… or if you sell land at $100k per acre to pay the interest on debt used to buy more land, no one would say this is bad for real estate prices, nor that this business model doesn’t work. The essence of a real estate developer is to buy low and sell high. Strategy is like a Bitcoin development company.”

Strategy President and CEO Phong Le also said during the earnings call: “If we sell Bitcoin to get dollars, or sell Bitcoin to get debt, and doing so can increase the number of Bitcoins per share, then we will consider doing so in the future.”

This marks a subtle but significant shift in Strategy’s attitude toward Bitcoin: no longer passively accumulating Bitcoin, but actively managing the balance sheet to maximize the number of Bitcoins per share.

According to Polymarket data, the probability that Strategy will sell BTC before December 31 this year has risen to 42%; the probability it will sell BTC before May 31 this year is 15%; and the probability it will sell BTC before June 30 this year is 29%.

Affected by the “selling coins” news, Strategy’s stock price fell more than 4% after hours.

2. What does Strategy’s “selling coins” mean?

Previously, Strategy has been a steadfast buyer of BTC, continuously increasing holdings regardless of bull or bear markets, and expanding positions through bonds and other means, forming a deep bond with BTC. But now, even this most committed long position holder has made remarks about possibly selling BTC.

First, market sentiment has shifted. When Strategy and its founder Michael Saylor repeatedly emphasized a buy-only strategy, many retail and institutional investors dared to enter. But now, people can’t help but wonder: if even the most steadfast large holder is going to sell, is the long-term value of BTC in question?

Second, the impact on the market. In the short term, this news directly caused Strategy’s stock price to drop 4%. However, it did not cause a direct impact on BTC’s price; as of press time, BTC surged past $81k, reversing its previous downward trend.

From a medium- to long-term perspective, if Strategy sells coins through over-the-counter (OTC) trades, the market impact will be relatively small; if it sells in batches on the open market, it will exert ongoing selling pressure on the crypto market.

But Strategy’s coin sales are not entirely bearish. As Saylor said, its sale of BTC might be aimed at obtaining more debt (funds), rather than simply selling BTC; the purpose of selling BTC is to buy more BTC.

Third, Strategy is shifting from a “HODL” model to an asset management and allocation model, which also signifies an upgrade in institutional investment logic. Previously, Strategy kept increasing its holdings and actively HODLing. Going forward, Strategy will adjust its BTC holdings based on market conditions, selling part of its BTC when necessary to maximize the value of Bitcoin per share—more aligned with mainstream financial asset management models.

3. Can the STRC digital credit model be sustained?

In Strategy’s financial report, STRC is a key focus and the source of the underlying rationale for coin sales.

Strategy President and CEO Phong Le said: “The adoption of Bitcoin will continue to grow in 2026. Digital credit tools represented by STRC have achieved great success. STRC demonstrates strong demand, high liquidity, and low volatility. So far this year, we have raised $5.6 billion through STRC, with daily trading volume reaching $375 million, and volatility reduced to 3%, all during a Bitcoin bear market. We also see traditional financial institutions and major banks like Morgan Stanley, Goldman Sachs, and Citibank announcing Bitcoin ETFs, trading, custody, and lending services.”

CFO Andrew Kang added: “Strategy is a leading global digital credit issuer, with over $13.5 billion in outstanding preferred shares, backed by a strong Bitcoin asset balance sheet. We have maintained a good record of timely and full dividend payments. Since launching preferred stock products in early 2025, we have paid dividends on time 23 consecutive times, totaling over $693 million. The strong demand for our digital credit tool STRC has driven its Bitcoin yield to 9.4% in the first four months of this year, with Bitcoin market cap increasing by about $5 billion.”

Founder and Executive Chairman Michael Saylor said: “Within just nine months, STRC’s market cap has grown to $8.5 billion, making it the largest preferred stock globally. By leveraging Bitcoin’s performance and building price stability, we have created a credit instrument with a Sharpe ratio of 2.53. This has fostered a broader digital credit ecosystem, with $150 million of STRC held by companies like Prevalon, Strive, and Anchorage, and over $270 million held by DeFi protocols like Apyx and Saturn. We also propose to shareholders to double the dividend frequency of STRC to bi-monthly, believing this will further enhance liquidity and stability, boosting STRC’s attractiveness.”

The company’s executives currently position STRC as the core pillar of its “digital credit” model.

STRC’s target price is $100, offering nearly 11.5% annual floating dividends, but its design has asymmetries that have attracted analyst attention. STRC’s shareholder returns are linked to Strategy’s balance sheet, but if Bitcoin prices fall or demand for stocks weakens, shareholders will still face downside risks.

In a sluggish crypto market, Strategy must consider whether it needs more cash flow. This directly influences the decision to sell coins. Strategy can reduce debt pressure, improve cash flow, and pay preferred dividends by selling coins.

Currently, Strategy has paid over $693 million in dividends to its preferred shares (including STRC, STRK, STRF, and STRD). But market disagreements over the STRC model are widening.

Critics argue it relies on a “cyclical” issuance, with some even calling it a Ponzi scheme. Others argue it’s a way to convert yield demands into Strategy’s Bitcoin exposure.

Last month, Bitwise CIO Matt Hougan described STRC as “a perpetual preferred stock traded like a stock but offering bond-like dividend yields,” adding that Strategy can raise “billions of dollars” through this instrument to fund more Bitcoin purchases.

Other analysts, including those from Grayscale, say that spot Bitcoin ETFs remain the “simplest” way to gain Bitcoin exposure without the complexity of preferred stock structures.

Fundamentally, the controversy stems from the fact that the STRC model depends on a dynamic balance between Bitcoin prices, financing capacity, and market demand. Any fluctuation in these factors could threaten its sustainability.

4. Has Strategy sold BTC before?

The answer is: yes.

The only clearly disclosed large-scale sale of BTC by Strategy was in December 2022, when about 704 BTC were sold. The official reason was not bearish sentiment but tax optimization—selling assets at a loss to offset other gains for tax purposes.

After selling 704 BTC to realize a loss and for tax deductions, Strategy repurchased 810 BTC two days later. This operation did not reduce its Bitcoin holdings; instead, it increased them. The market interpreted this coin sale as a technical move, so it did not cause much upheaval.

However, in this current expectation of selling coins, the BTC sold might be used for dividends or debt optimization, marking a fundamental shift from a buy-only strategy.

The sale three years ago was for acquiring more Bitcoin, while this year’s potential sale is aimed at optimizing capital structure—two fundamentally different purposes.

Conclusion

Strategy is shifting from being the most loyal buyer to actively managing its Bitcoin holdings. As the crypto market matures, BTC is increasingly becoming a configurable financial instrument. When even the most steadfast long-term holders are adjusting their strategies, the rules of the crypto game have changed.