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

Tao Zhu, Jinse Finance

Summary: On June 29, 2026, Strategy announced the launch of a Digital Credit Capital Framework, establishing a new capital management system around dollar reserves, preferred stock dividends, securities repurchases, common stock repurchases, and BTC monetization. This means that, while maintaining its long-term Bitcoin holding strategy, Strategy is moving from continuous financing to buy Bitcoin toward a more proactive capital management phase.

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

Strategy released an announcement disclosing the Digital Credit Capital Framework, Dollar Reserve Policy, STRC Dividend Policy, Digital Credit and MSTR Repurchase Authorization, and BTC Monetization Plan. Strategy announced that the company has adopted a Digital Credit Capital Framework, aimed at strengthening the company's various preferred securities (collectively, "Digital Credit Securities"), improving liquidity, maintaining long-term Bitcoin exposure, and supporting long-term value creation for shareholders.

The framework consists of five components:

1. Dollar 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 Program.

Specifically, regarding the Dollar Reserve Policy: According to the Board-approved Dollar Reserve Policy, Strategy's dollar 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 also further established a company policy to maintain a minimum dollar reserve of at least 12 months of the currently 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 dollar 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 Extended Preferred Stock (STRC) to 12.00% per semi-monthly dividend payment period, effective from the record date 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, dollar 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, including STRC, 10.00% Series A Perpetual Stride Preferred Stock (STRF), 10.00% Series A Perpetual Step Preferred Stock (STRD), and 8.00% Series A Perpetual Strike Preferred Stock (STRK), for a total purchase price of up to $1 billion. If management believes that repurchases would enhance earnings and strengthen the company's capital structure, STRC will be the primary priority of the Digital Credit Repurchase Program.

Regarding MSTR Repurchases: Strategy has established a repurchase program to repurchase its Class A common stock with a total 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: raising up to $1.25 billion to bolster dollar reserves; when management deems it more favorable than issuing Class A common stock or other capital market transactions, additionally funding preferred stock dividends and interest expenses, or replenishing dollar reserves after making such payments; and funding the repurchase of Digital Credit Securities or Class A common stock under the repurchase program, including related taxes and transaction costs.

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

The STRC stock price rose 12.2% to $83.67. Based on an anchor price of $100, it remains unanchored by 16.33%.

II. Detailed Explanation of the Five "New Strategies"

In the past few years, Strategy has been in a mode of financing, buying Bitcoin, refinancing, and buying more Bitcoin. Continuous purchases have solidified Strategy's position as the top BTC treasury company. As a result, MSTR has evolved into the most representative "Bitcoin leveraged asset" in the capital market.

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

When the Bitcoin price rises, the company's net assets increase, and the MSTR stock price rises; after the stock price rises, the company can issue common stock through the ATM program to raise funds at higher valuations; the newly raised funds are again used to purchase Bitcoin, thereby further expanding the company's BTC reserves and driving the next round of capital expansion. Many people even think that Strategy is taking off by stepping on its own feet.

At the same time, Strategy has been continuously diversifying 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 financing sources through convertible bonds and other methods. This model operated very smoothly during the bull market, but as the scale of financing grew larger, the company's capital structure also changed.

Strategy has gone from facing common shareholders to facing preferred shareholders, bond investors, large institutions, etc. Currently, due to factors such as the expansion of asset scale and the downturn of the BTC market, Strategy's customary model of using financing and BTC price increases to drive company asset growth is facing new challenges.

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

Dollar Reserves: Addressing Liquidity Concerns

According to the official announcement, as of June 28, Strategy's dollar reserves were approximately $2.55 billion, sufficient to cover approximately 17.4 months of preferred stock dividends and debt interest; if combined with the Board-approved maximum BTC monetization amount of $1.25 billion, the company's liquidity coverage period could increase to approximately 25.9 months.

Common stock investors focus on the long-term value of the stock, but for preferred stock investors, cash flow directly determines whether the company can continue to pay dividends and debt interest. Strategy is providing reassurance to liquidity doubters by clarifying dollar reserves.

Adjusting Dividend Rates: Addressing Preferred Stock De-anchoring

The STRC dividend mechanism more directly reflects the market's pricing pressure on Strategy's preferred stock. As mentioned above, even after the announcement, STRC did not return to its normal anchor price—it remains unanchored by 16.33%. De-anchoring means that investors have certain concerns about the issuer's credit risk, the product's future interest rate trajectory, and fund 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, dollar reserve coverage, capital market conditions, and the company's overall capital structure. The company may also respond to market conditions through dollar reserve management, Bitcoin monetization, Digital Credit Securities repurchases, MSTR common stock repurchases, and other capital allocation measures.

Strategy is trying to gradually bring STRC back to its $100 anchor price through more proactive capital management, thereby reducing overall future financing costs.

Digital Credit Securities Repurchases: Reducing Capital Costs

Strategy will repurchase its outstanding Digital Credit Securities for a total purchase price of up to $1 billion, and if management believes that repurchases would enhance earnings and strengthen the company's capital structure, STRC will be the primary priority of the Digital Credit Repurchase Program.

For preferred stock, active repurchases usually mean that management believes the market price is significantly below intrinsic value. For example, if Strategy repurchases STRC at the current price of $83.67, it means Strategy is canceling a liability with a face value of $100 for $83.67. This can reduce dividend payments while improving the balance sheet.

MSTR Repurchases: Reflecting the Transition to Active Capital Management

When the MSTR stock price rises, the company continuously issues common stock through the ATM to raise funds to buy Bitcoin. However, the premise for continuous buying is that the company's stock valuation is relatively favorable.

Strategy announced a repurchase program for its Class A common stock with a total purchase price of up to $1 billion. Depending on market conditions, trading prices, 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 stock repurchase transactions, or other methods permitted by law. This means Strategy will have two-way capital management capabilities: when the stock is overvalued, the company can issue stock to finance Bitcoin purchases; when the stock is undervalued, it can use cash or other capital sources to buy back shares, enhancing per-share value.

As Strategy CEO Phong Le stated: "Strategy is moving from one-way capital issuance to active capital management. We plan to issue securities when capital is abundant and repurchase securities when they are trading at levels that make repurchases profitable. This flexibility is designed to create shareholder value, enhance company performance, and improve the quality and market position of Strategy's 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 Bitcoin hoarding strategy, but the announcement strictly limits the use of BTC sale proceeds to three categories: replenishing dollar reserves, paying preferred stock dividends and debt interest, and repurchasing preferred securities or common stock. The Board only authorized a maximum of $1.25 billion.

This means the role of Bitcoin on Strategy's balance sheet has changed. It is not abandoning the Bitcoin accumulation strategy, but rather transforming BTC from a nearly immobile reserve asset into a strategic capital tool that can support liquidity management, capital optimization, and securities repurchases.

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

III. Voices from Industry Insiders

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

• Prathik Desai pointed out: The STRC preferred stock debt product will first experience stress and deformation, not an immediate collapse. Although Strategy has not yet had any overdue STRC dividend payments, the core change is that the volatility of this product has now exceeded the risk asset Bitcoin, which it was supposed to help investors hedge against. The stable income promised to potential investors is now completely unfulfillable. The direct consequence is that the company's financing machine, which it relied on for expansion, is under pressure. For details, see "Strategy Nearing a Pressure Breaking Point."

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

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

Conclusion

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