Strategy Should Have Already Said Not to Rule Out Selling Coins

Author: Chloe, ChainCatcher

Yesterday, Strategy announced its Q1 2026 financial report, with a net loss of $12.54 billion for the quarter, stemming from unrealized losses caused by the decline in Bitcoin. At the same time, Michael Saylor stated at the meeting: “We might sell some Bitcoin to pay dividends, to inject confidence into the market and to convey that we have already achieved this goal.” CEO Phong Le emphasized at the same meeting: “We will sell when it benefits the company.”

Saylor has completely reversed the “never sell Bitcoin” belief he has upheld over the past few years.

Once the news broke, MSTR dropped over 4% after hours, and BTC also fell below $81,000 in response. Strategy currently holds 818,334 BTC, with an average cost of about $75,537, and a total value of approximately $66.7 billion, accounting for about 4% of the global circulating BTC.

And when the world’s largest corporate BTC holder declared that “selling Bitcoin is an acceptable option,” the crypto market once again brought up the often-asked question: if Saylor really starts selling, how will the market move?

Are the bulls and bears engaged in a tug-of-war, with selling as a strategic move?

To answer the impact of selling on the market, we first need to understand one thing: why did Saylor choose to shift at this particular time? There are two completely different interpretations in the market, and these will lead to entirely different price expectations.

From a bullish perspective, this is a “preemptive move.” Based on Saylor’s own statements, as well as analyses from Bernstein and others, and an in-depth interpretation of the Q1 earnings call by The Crypto Times, Saylor’s target is to counter those who are bearish on Strategy. In other words, he is trying to dispel long-standing doubts about Strategy’s cash flow by actively selling a small portion of Bitcoin.

Strategy pays an annual dividend of 11.5% on its preferred stock STRC, totaling about $1.5 billion per year. But its software business revenue is almost negligible, and Bitcoin generates no cash flow, so it will inevitably be forced to keep issuing common stock to raise cash to pay dividends. This massive stock issuance dilutes existing shareholders and could crush MSTR’s stock price, triggering a chain reaction. This scenario has been the main concern of bears in the past.

Strategy aims to demonstrate that it can pay dividends directly from its BTC holdings and can stop issuing common stock at any time. Saylor also said during the call: “If you’re bearish on us, your argument is that this company must sell stock to pay dividends, but I am happy to prove you wrong.”

Additionally, he revealed that Strategy’s current holdings only need BTC to increase by 2.3% annually to indefinitely cover all STRC dividend obligations, without needing to sell any common stock. Considering that historically, BTC’s long-term average annual return exceeds 20%, this 2.3% threshold is almost negligible.

Meanwhile, Bernstein analyst Gautam Chhugani echoed this view in a report at the end of April, stating that “the best days of crypto are still ahead,” and pointed out that STRC is a “high-yield, low-volatility” instrument, attracting and recycling funds into more BTC purchases. Bernstein believes that the STRC mechanism itself is the engine for the next Bitcoin rally, more critical than inflows from spot ETFs.

From this perspective, Saylor’s so-called “selling” might be small-scale, symbolic, and planned rather than panic-driven. If the market accepts this narrative, prices could even strengthen due to “uncertainty being eliminated.”

Furthermore, from a macro perspective, Saylor’s active move to sell Bitcoin might be a proactive market stress test. If Strategy never tests the market’s reaction to its Bitcoin sales and always treats “selling Bitcoin” as a taboo, that would be the greatest hidden risk. Because if one day Strategy is forced to sell urgently, the market has never “practiced” how to absorb such shock, and reactions could be even more panic-driven.

It can be said that rather than letting “whether Strategy will sell Bitcoin someday” become a ticking time bomb over the crypto market, it’s better to dismantle the fuse now.

Is Strategy a classic Ponzi scheme?

However, the bearish perspective is entirely opposite. Economist Peter Schiff as early as March called Strategy’s entire capital structure a “Bitcoin Ponzi.” He believes that Strategy’s main financing tool, STRC, is a deliberately designed preferred stock with a face value around $100 and an annual dividend of 11.5%, aimed at attracting conservative institutional funds, which are then used to buy BTC.

Peter Schiff states that when the market declines and STRC faces pressure to fall below its $100 face value, the only tool Strategy has to support the price is to increase the dividend yield, which has been pushed from 9% at issuance last July to 11.5%. Currently, the total annual dividend payment is about $1.5 billion, and each new round of STRC issuance will further increase this bill.

This $1.5 billion is Schiff’s core concern. He argues that software revenue is negligible, BTC generates no cash flow, and paying dividends can only come from issuing new STRC to raise funds: using new investors’ money to pay old investors’ dividends—classic Ponzi structure.

Once cash reserves are exhausted—currently about $2.25 billion, supporting 18 months—Saylor has only two options: declare dividend default, which would immediately destroy STRC and trigger a confidence crash; or start liquidating BTC for USD to pay dividends, which is exactly what is happening now.

Moreover, The Financial Times used a sharper metaphor: Jenga. It compared the STRC flywheel to the MBS before the 2008 financial crisis: back then, demand for “safe” AAA securities drove up housing prices, which in turn “validated” the safety of these securities, until housing prices stopped rising and the entire structure began to fail.

The FT also pointed out an often-overlooked legal detail: although marketed as “over-collateralized by Bitcoin,” STRC is legally an unsecured security, with no priority claim on Strategy’s BTC. If Strategy were to go into liquidation, STRC holders would rank behind $8.2 billion in convertible bonds and $1.3 billion in STRF preferred stock, and only after these claims are satisfied would they get their share.

K33 research director Vetle Lunde also issued a similar warning: STRC holders face an asymmetric structure—“upside capped by dividends, but downside risk is real”; if this instrument remains below face value long-term, its behavior would resemble credit risk rather than stable income.

From this perspective, Saylor’s claim of “giving the market a confidence boost” might actually be the first sign that the Ponzi structure cannot sustain itself.

If the market begins to accept this development, Strategy will lose its ability to generate a flywheel of issuing shares to buy BTC, ultimately forcing it into a genuine sell cycle. Since Strategy owns 4% of the circulating BTC, if it shifts from a large buyer to a large seller, the impact on BTC prices would be unprecedented.

Notably, data from Polymarket shows the market is currently conflicted. Before the Q1 earnings report, bets on “Strategy selling any BTC in 2026” accounted for only about 10%. After Saylor’s recent comments on selling, the probability shot up to 48%. Meanwhile, Polymarket estimates a 42% chance that BTC will reach $100k by year-end, and a 55% chance it will fall back to $55k before then. The market is clearly stuck between a “strong rebound” and “further deepening.”

Conclusion

So, if Saylor sells Bitcoin, will the crypto market plummet?

From the numbers on paper, if Strategy only sells a small amount of BTC, the impact would be limited. Assuming annual sales equal to the dividend obligation—about $1.5 billion—this scale is relatively small compared to Strategy’s past frequent BTC purchases, so “small-scale selling” wouldn’t cause a strong downward shock. Moreover, if the selling is “small and announced in advance,” the market is likely to absorb it.

But market sentiment is another matter. Over the past six years, the crypto market has taken Strategy’s “never sell” as a core belief, assuming that BTC bought by Strategy effectively disappears from circulation forever, never returning as selling pressure. This assumption is a key part of the bullish narrative: “The largest institutional holder guarantees not to sell,” an implicit premise for the market’s structural optimism. Once this premise disappears, the market must start recalculating an unquantified variable—the fact that “Strategy becomes a seller.”

Finally, a deeper impact lies in whether this could influence other DATs. Strategy’s success has led to over 100 listed companies copying its model, but currently about 40% of their market valuations are below the actual value of their BTC holdings. If even Strategy begins to sell, those small DATs with market caps below NAV and unable to raise funds through stock issuance would have little reason not to follow suit. A wave of deleveraging and collective sell-offs among DAT companies could trigger a significant market downturn.