Zach Bandel, head of Grayscale research, has put the strategy’s Bitcoin treasury under new review. His comments focus on whether a larger BTC sale could better alleviate investors’ fears than another increase in STRC’s profits.
summary
- Selling more Bitcoin could remove doubts about the strategy’s cash liabilities and profits, Bandel says.
- STRC trading below $100 keeps the pressure on the strategy’s preferred stock model and future financing options.
- Crypto.news reports linked Strategy’s small BTC sale to broader concerns about leverage and liquidity risks.
Bandel said STRC’s 50 basis point dividend increase next week would add about $100 million to its dividend obligations over the next two years. He said the move “will likely not restore market confidence” because it will not remove the question about future cash needs.
He said selling more than $3 billion worth of bitcoin could be more effective. In his view, such a sale could cover almost all of the cash commitments over the next two years and give investors a clearer view of how the strategy plans to manage its preferred stock costs.
Strategy, formerly known as MicroStrategy, remains the largest holder of Bitcoin. The company has built its public market identity around buying and holding Bitcoin, while using equity, debt and preferred stock to fund the strategy.
STRC continues to push the Treasury model
The discussion focuses on STRC, the strategy’s variable rate preferred stock. The company designed the product to trade near $100, and currently pays an 11.5% annual dividend. However, STRC stock has traded below its target level during recent market stress.
Such as crypto.news I mentioned Earlier, Strategy sold 32 bitcoins for about $2.5 million between May 26 and 31. The sale was small compared to its bitcoin treasury, but it attracted attention because it was the company’s first reported bitcoin sale since December 2022.
This sale also changed how investors viewed the company’s financing model. The strategy has long served as a consistent buyer of Bitcoin. Even the small sale raised doubts about whether the company might need to sell more bitcoin if preferred stock costs continue to rise.
Crypto.news too I mentioned STRC later fell to a low of $82.50, while its actual yield moved closer to 13.2%. A high yield can show that investors want more yield to hold the stock.
The cash runway becomes the key question
At CryptoQuant estimated The annual dividend obligations for that strategy associated with STRC were approximately $1.2 billion. The company also estimated that dividend coverage declined to approximately 14 months as cash reserves decline through 2026.
These numbers explain why the idea of a $3 billion sale of Pandl is attracting interest. A planned BTC sale could raise funds before the pressure builds. It can also show that the strategy can meet fixed commitments without relying solely on new stock sales or a rise in the price of Bitcoin.
Recent market reports told the strategy later Bought 520 Bitcoin For about $34.9 million, bringing the total holdings to 847,363 Bitcoin. The company also accumulated cash reserves of about $300 million, showing that it has not stopped using the capital markets to support both Bitcoin holdings and dividend needs.
For investors, the next focus is STRC price against the $100 level. If the preferred stock remains below that mark, the strategy may face more pressure to adjust payouts, raise cash, or sell bitcoin in a more planned manner.
