Strategy recently confirmed the sale of 3,588 bitcoins, with a cash balance of approximately $216 million, which will be used to pay for the related dividends of Digital Credit securities. The transaction was a matter of rapid concern, as the company had long been known for its continued increase in the holding of bitcoin, which had been rarely sold directly.
Schiff criticizes the paradigm shift.
The economist Peter Schiff wrote on platform X on 7 July that Strategy's current financing model was different from the earlier approach of relying mainly on debt and equity purchases of bitcoin, and described it as a “Ponge model in the middle of the cycle”.
His criticism focused on one point: while placing emphasis on the long-term possession of bitcoin, the company began to sell part of the hold in order to meet the need for dividends. This has led to a re-examination of how Strategy balances the return of shareholders, the cost of debt, and the expansion of the Bitcoin reserve.
Sales proceeds used for dividends
According to company disclosures, the proceeds of this sale will be used to meet the red-red obligation for Digital Credit securities. At the same time, Strategy recently launched Digital Credit Capital Platform, which allows companies to sell up to $1.25 billion in bitcoin, if necessary.
- Supplementary cash reserve
- Pay priority share
- Debt-related expenditure covered
In addition, the funds could be used for stock buy-backs. The company also increased the rate of the SRC priority share to 12 per cent. These arrangements show that Strategy is combining the Bitcoin Treasury with more flexible capital management tools and is no longer fully committed to a single path of “buy-no-sale”.
Saylor emphasizes long-term direction.
Despite external doubts about the warming, the Executive Director, Michael Saylor, defended this practice. He stated that companies did not abandon the long-term orientation of holding bitcoin, but rather took a more flexible approach to capital management.
The focus of Saylor's presentation is not “never to sell”, but rather to avoid becoming a net seller of bitcoin for a long time. In other words, Strategy still regards Bitcoin as a core reserve asset, but with the need for dividends, debt and liquidity management, limited holding adjustments may continue in the future.
As at the current sale, 843,775 bitcoins remained on Strategy ' s balance sheet and remained one of the largest listed companies in the world. The transaction also meant that the market would then focus more on how the company dealt with the cost of financing, the return of shareholders and the increased strategy of bitcoin.