Strategy recorded an $8.32 billion valuation loss on its bitcoin holdings in the second quarter and sold 3,588 BTC for about $216 million over the same period.

CryptoSlate, a blockchain media outlet, reported on July 7 local time that the sale was intended to secure funds for preferred dividend payments, signaling a shift from the company’s previous operating approach of steadily accumulating bitcoin.

Strategy said in a July 6 filing that it sold 3,588 bitcoin in two tranches from June 29 to July 5. It sold 1,363 BTC at an average price of $59,256 from June 29 to 30 and 2,225 BTC at an average price of $60,773 from July 1 to 5. Including 32 BTC disposed of earlier, the total sold in the second quarter was 3,620 BTC.

Strategy said its net buying stance has not reversed. It bought more than 85,000 BTC during the reporting period and held 843,775 BTC as of July 5. The acquisition cost of the remaining holdings was about $63.69 billion, with an average purchase price of $75,476 per bitcoin. The recent sale prices were below that average. On-chain analytics firm Lookonchain estimated the sale locked in losses of more than $55 million.

The company said that because the book value of bitcoin was below its acquisition cost as of June 30, it recorded a second-quarter digital asset valuation loss. Strategy said the acquisition cost of its bitcoin holdings exceeded fair value as of June 30. It said it therefore fully reflected deferred tax benefits linked to unrealised losses and a valuation allowance against deferred tax assets.

Strategy said the proceeds from selling 3,588 BTC will be used to pay preferred distributions. It said it also plans to use funds to replenish dollar reserves already used for those payments. Dollar reserves stood at $2.55 billion as of July 5. The reserves are intended to cover preferred dividends and interest costs on existing debt.

Over the same period, Strategy did not sell common stock under its at-the-market issuance program and did not repurchase common or preferred shares. A $1.25 billion bitcoin monetisation program also remains in place.

That has brought bitcoin further to the fore as a direct tool for the company’s capital management. Under this structure, Strategy can sell bitcoin to restore dollar reserves and secure funds for preferred dividends, debt repayment and buybacks of common and preferred shares. While a model centered on raising capital to buy bitcoin had been key, it has now also begun to show a pattern of selling bitcoin to sustain that financing structure.

The market has also raised the possibility of further sales. Jiang Zhuoer (장줘얼), founder of Chinese mining pool BTC.top, argued that 20,000 units already approved by shareholders are likely to be sold in full. He said Strategy could engage in trading using large volumes.

Others offered a different interpretation. Bill Miller IV (빌 밀러 4세) of Miller Value Partners said shareholders and bitcoin supporters could view the sale positively. He said the transaction creates a tax benefit by realising losses and helps show credit rating agencies that bitcoin is liquid enough to support corporate debt.

Sam Altman (샘 알트먼), chief executive of OpenAI, has promoted a long-term concept that has been put to a real-world test in this case. He has argued that bitcoin’s next decade will be shaped more by expanding financial structures such as exchange-traded funds, corporate finance, bank credit, derivatives, collateral markets and sovereign reserve assets than by protocol changes or halvings. The sale showed Strategy has started using bitcoin not only as a holding but also as a source of funds to meet the company’s cash needs.

This structure is easy to maintain when bitcoin prices rise and the company’s share price trades at a premium to the value of its holdings. But if bitcoin prices fall and the stock weakens, it must manage three tasks at once: securing liquidity, avoiding unfavorable share issuance and maintaining preferred investors’ confidence. Whether Strategy moves to sell more bitcoin as preferred dividends, debt costs and reserve needs grow is expected to be a turning point.

MSTR sold 3,588 BTC for $216 million. This is MSTR’s first large-scale coin sale, and it comes despite having $2.55 billion in cash reserves, enough to pay 17.6 months of interest. It proactively sold more bitcoin than needed to pay interest, declaring that the myth that MSTR never sells coins has been broken. I do not understand MSTR’s reason for selling coins in a big way now. Even if it lacks dollars, it can use its big move, continuing to issue more common shares, … pic.twitter.com/OZ9evfOK88