Strategy ushers in the era of capital management: Why allow selling BTC?

Tao Zhu, Golden Finance

Summary: On June 29, 2026, Strategy announced the launch of the Digital Credit Capital Framework, establishing a new capital management system around USD reserves, preferred stock dividends, securities repurchase, common stock repurchase, and BTC monetization. This means that, while adhering to the long-term Bitcoin holding strategy, Strategy has begun to move from continuous fundraising to buy coins towards a more proactive capital management phase.

I. Quick Overview of "Strategy's New Strategy"

Strategy released an announcement, detailing the Digital Credit Capital Framework, USD Reserve Policy, STRC Dividend Policy, Digital Credit and MSTR Repurchase Authorization, and BTC Monetization Plan. Strategy announced that the company has adopted the Digital Credit Capital Framework, designed to strengthen various classes of the company's preferred securities (collectively, "Digital Credit Securities"), enhance liquidity, maintain long-term Bitcoin exposure, and support long-term value creation for shareholders.

The framework comprises five components:

1. USD Reserve Policy approved by the Board of Directors;

2. Revised STRC Dividend Policy;

3. Digital Credit Securities Repurchase Program;

4. Class A Common Stock Repurchase Program;

5. Bitcoin Monetization Plan.

Specifically, regarding the USD Reserve Policy, under the Board-approved USD Reserve Policy, Strategy's USD reserves may only be used to pay dividends on Strategy's preferred stock and interest on outstanding debt. Any other use requires Board approval. The Board has further established a company policy to maintain a minimum USD reserve equivalent to at least 12 months of expected annual preferred stock dividend payments and interest expenses. Any reduction in reserves below 12 months requires Board approval. Strategy also plans to maintain liquidity coverage for preferred stock dividends and debt interest payments through USD reserves and Board-authorized Bitcoin monetization capabilities.

Regarding the STRC Dividend Policy, Strategy will increase the annual regular dividend rate on its Floating Rate Series A Perpetual Deferrable Preferred Stock (STRC) to 12.00% per increment period, effective for dividend record dates on or after July 1, 2026. Strategy plans to evaluate the STRC dividend rate monthly based on a range of factors, including STRC trading levels, market yields, credit spreads, BTC price and volatility, USD reserve coverage, capital market conditions, and the company's overall capital structure.

Regarding Digital Credit Securities repurchases, Strategy has established a repurchase program to repurchase its outstanding Digital Credit Securities at an aggregate purchase price of up to $1 billion, including STRC, 10.00% Series A Perpetual Conflict Preferred Stock (STRF), 10.00% Series A Perpetual Step Preferred Stock (STRD), and 8.00% Series A Perpetual Strike Preferred Stock (STRK). If management believes repurchases could enhance earnings and strengthen the company's capital structure, STRC will be the primary priority under the Digital Credit repurchase program.

Regarding MSTR repurchases, Strategy has established a repurchase program to repurchase its Class A common stock at an aggregate purchase price of up to $1 billion.

Regarding the Bitcoin Monetization Plan, the Strategy Board of Directors has approved a BTC monetization plan under which the company may from time to time sell BTC for three primary purposes: to raise up to $1.25 billion to bolster USD reserves; to additionally fund preferred stock dividends and interest expenses when management deems it more advantageous than issuing Class A common stock or other capital market transactions, or to replenish USD reserves after making such payments; and to fund the repurchase of Digital Credit Securities or Class A common stock under repurchase programs, including related taxes and transaction fees.

Following the release of Strategy's new strategy, MSTR stock price rose 12.60% to $92.68.

STRC stock price rose 12.2% to $83.67. Based on the par value of $100, it remains unpegged by 16.33%.

II. Detailed Explanation of the Five "New Strategies"

In the past few years, Strategy has been in a cycle of fundraising, buying coins, refinancing, and buying more coins. This continuous accumulation has solidified Strategy's position as the top BTC treasury company. MSTR has thus evolved into the most representative "Bitcoin leveraged asset" in the capital market.

From 2020 to 2025, Strategy established a nearly perfect capital flywheel.

When Bitcoin prices rise, the company's net asset value increases, and MSTR stock price rises; after the stock price rises, the company can issue common stock through an ATM program to raise funds at a higher valuation; the new funds raised are again used to purchase Bitcoin, further expanding the company's BTC reserves and driving the next round of capital expansion. Many even believe Strategy is achieving lift-off by stepping on its own feet.

At the same time, Strategy has continuously diversified its financing tools. In addition to common stock, the company has successively launched various preferred securities such as STRK, STRF, STRD, and STRC, and has continuously expanded funding sources through convertible bonds and other means. This model operated smoothly during the bull market, but as financing scale grew larger, the company's capital structure also changed.

Strategy now faces common shareholders, preferred shareholders, bond investors, large institutions, etc. Currently, due to factors such as expanding asset scale and declining BTC market trends, Strategy's usual model of funding and BTC appreciation driving asset growth is facing new challenges.

To address this, Strategy announced the Digital Credit Capital Framework.

USD Reserves: Addressing Liquidity Concerns

According to the official announcement, as of June 28, Strategy's USD reserves were approximately $2.55 billion, sufficient to cover approximately 17.4 months of preferred stock dividends and debt interest payments; with the addition of the Board-authorized BTC monetization capacity of up to $1.25 billion, the company's liquidity coverage period could increase to approximately 25.9 months.

Common stock investors focus on long-term stock value, but for preferred stock investors, cash flow directly determines whether the company can continue paying dividends and debt interest. Strategy is explicitly addressing liquidity concerns by clarifying USD reserves.

Adjusting Dividend Rate: Addressing Preferred Stock De-pegging

The STRC dividend mechanism more directly reflects market pricing pressure on Strategy's preferred stock. As mentioned above, even after the announcement, STRC failed to return to its normal par price—still de-pegged by 16.33%. De-pegging indicates investors' concerns about the issuer's credit risk, future interest rate trends of the product, and capital liquidity.

Therefore, Strategy plans to evaluate the STRC dividend rate monthly based on a range of factors, including STRC trading levels, market yields, credit spreads, BTC price and volatility, USD reserve coverage, capital market conditions, and the company's overall capital structure. The company may also respond to market conditions through USD reserve management, Bitcoin monetization, Digital Credit Securities repurchases, MSTR common stock repurchases, and other capital allocation measures.

Strategy is attempting to gradually return STRC to its par value of $100 through more proactive capital management, thereby lowering overall future financing costs.

Digital Credit Securities Repurchases: Reducing Capital Costs

Strategy will repurchase its outstanding Digital Credit Securities at an aggregate purchase price of up to $1 billion, and if management believes repurchases could enhance earnings and strengthen the company's capital structure, STRC will be the primary priority under the Digital Credit repurchase program.

For preferred stock, active repurchases typically indicate management believes market prices are significantly below intrinsic value. For example, when Strategy repurchases STRC at the current price of $83.67, it means Strategy cancels $100 face value liabilities using $83.67. This can reduce dividend payments while improving the balance sheet.

MSTR Repurchases: Reflecting the Transformation to Active Capital Management

When MSTR stock price rises, the company continuously issues common stock through ATM to raise funds to buy BTC. However, the precondition for continuous buying is favorable company stock valuation.

Strategy announced the repurchase of its Class A common stock at an aggregate purchase price of up to $1 billion. Depending on market conditions, trading price, liquidity, applicable legal requirements, and other factors, the company may from time to time repurchase shares through open market purchases, block trades, privately negotiated transactions, accelerated share repurchase transactions, or other methods permitted by law. This means Strategy will have bidirectional capital management capabilities: when stock is overvalued, the company can issue stock to raise funds to buy BTC; when stock is undervalued, it can use cash or other capital sources to repurchase shares and enhance per-share value.

As Strategy CEO Phong Le stated: "Strategy is shifting from one-way capital issuance to active capital management. We plan to issue securities when capital is abundant and repurchase securities when they trade at levels that make repurchases profitable. This flexibility is designed to create shareholder value, enhance company performance, and strengthen the quality and market position of Strategy securities in the eyes of investors."

BTC Monetization Plan: From Reserve Asset to Strategic Capital Tool

Many believe this is a signal that Strategy is abandoning its coin-hoarding strategy, but the announcement strictly limits the use of BTC sale proceeds to three categories: supplementing USD reserves, paying preferred stock dividends and debt interest, and repurchasing preferred securities or common stock. The Board has only authorized up to $1.25 billion.

This means Bitcoin's role on Strategy's balance sheet has changed. It does not mean abandoning the coin-hoarding approach; rather, BTC has transitioned from a virtually stationary reserve asset to a strategic capital tool that can support liquidity management, capital optimization, and securities repurchases.

Strategy CFO Andrew Kang stated: "Bitcoin is capital. This plan gives Strategy the flexibility to use a portion of its Bitcoin reserves to strengthen digital credit, supplement USD reserves, pay dividends and interest expenses, and conduct value-enhancing repurchases when monetizing Bitcoin is more advantageous than issuing common stock. With $2.55 billion in USD reserves and $1.25 billion in Board-authorized Bitcoin monetization capacity, Strategy currently has approximately 25.9 months of liquidity coverage for preferred stock dividends."

III. Industry Voices

• Michael Saylor said: At the same time, digital credit requires liquidity, discipline, and active capital management. This framework aims to improve credit quality and enable the company to reduce dividend payments in the context of anticipated increases in preferred stock dividends. It also outlines how we plan to use our capital management tools while maintaining our commitment to long-term Bitcoin investment.

• Prathik Desai pointed out: The STRC preferred stock debt product will only first come under pressure to deform, not collapse directly. Although Strategy has not missed any STRC dividend payment period, the core change is that the volatility of this product now exceeds the risk asset Bitcoin it was supposed to help investors hedge against. The stable returns originally promised to potential investors are now completely unachievable. The direct consequence is that the company's financing machine, which drives expansion, is under pressure. For details, see "Strategy Approaching Pressure Critical Point"

• CZ stated in an interview that Strategy's STRC preferred stock structure is "overly complex" and said "it took many attempts to understand STRC." This product relies on Bitcoin as its underlying collateral, introducing a structural contradiction: the long-term appreciation theory of Bitcoin may be reasonable, but its volatility makes it a challenging basis for leveraged instruments. CZ also emphasized that he does not evaluate the credibility of its founder Michael Saylor, calling him a "staunch Bitcoin supporter."

• Investment firm Benchmark reiterated a Buy rating on Strategy, maintaining a target price of $570, implying approximately 515% upside from the stock's Monday closing price of $92.68.

Conclusion

Since the crypto market downturn, countless crypto treasury companies have disappeared. Strategy's current attempt is exploring a new path: after holding massive amounts of BTC, how to maintain long-term allocation of these assets while supporting financing capacity and boosting investor confidence. From being the world's largest BTC treasury enterprise to thinking about how to establish a more mature asset management system, Strategy is ushering in a 2.0 era.