Understanding Strategy's Bitcoin Strategy and Future Sale Dynamics

Strategy is the largest corporate holder of Bitcoin, owning around 650,000 BTC.
The company's operations focus on raising capital to convert it into Bitcoin while maintaining its market-cap-to-Bitcoin value (mNAV) above 1.
CEO Phong Le describes any potential Bitcoin sales as a “last resort,” which would only be considered if mNAV falls below 1 and access to new capital worsens significantly.
In the event of a sale, it would likely be a targeted approach rather than a complete exit, given the substantial daily trading volume of Bitcoin.

Key Takeaways

Strategy is the largest corporate holder of Bitcoin, owning around 650,000 BTC.
The company's operations focus on raising capital to convert it into Bitcoin while maintaining its market-cap-to-Bitcoin value (mNAV) above 1.
CEO Phong Le describes any potential Bitcoin sales as a “last resort,” which would only be considered if mNAV falls below 1 and access to new capital worsens significantly.
In the event of a sale, it would likely be a targeted approach rather than a complete exit, given the substantial daily trading volume of Bitcoin.

Strategy, formerly known as MicroStrategy, is recognized as the largest corporate holder of Bitcoin, with nearly 650,000 BTC on its balance sheet. This figure represents over 3% of the total 21 million Bitcoin supply and marks the largest stake owned by any public company.

For many traditional investors, Strategy's stock acts as a leveraged proxy for Bitcoin itself. Instead of purchasing Bitcoin directly, they choose to buy the stock, as the company continuously raises capital to convert into Bitcoin.

Recent comments from CEO Phong Le have spurred discussions on the potential for selling Bitcoin under specific conditions. Although headlines emphasize the term "sell," the company views this as a risk management strategy rather than a shift in its long-term commitment to owning Bitcoin. This article explains how the company's strategy operates and what events might trigger a sale, aiming to help readers understand future developments without succumbing to panic or FOMO (fear of missing out). Please note that this guide is informational and does not constitute investment advice.

Did you know? Recent estimates indicate that institutions now own almost 20% of all mined Bitcoin.

Understanding Strategy's Bitcoin Strategy and Future Sale Dynamics

How Strategy’s Bitcoin Strategy Works

Day-to-day, Strategy operates through a straightforward financial cycle. The company:

Raises capital in traditional markets using common-stock at-the-market programs, various series of perpetual preferred stock such as STRK and STRF, and occasional convertible debt.
Invests a significant portion of that raised capital into Bitcoin, which it considers its primary reserve asset.
Monitors specific metrics to assess the sustainability and benefits for shareholders.

Two critical metrics include:

Bitcoin per share (BPS): This indicates the total amount of Bitcoin behind each fully diluted share, which Strategy considers a vital performance metric.
Market-cap-to-net-asset-value (mNAV): This ratio compares Strategy’s total market value with the market value of its Bitcoin holdings. When mNAV exceeds 1, the stock is of higher value than the Bitcoin it possesses.

When the company trades at a premium, it allows for raising new equity or preferred shares with minimal dilution, enabling continuous growth in its Bitcoin holdings. This foundational strategy—where Strategy raises capital at a premium, purchases more Bitcoin, and increases BPS—remains the model management intends to pursue.

Strategy’s Bitcoin Growth

The “Last Resort” Sale Trigger

A new aspect introduced is a defined contingency for the company's model. In recent interviews, Le clarified that Strategy would contemplate selling some Bitcoin only if the following two conditions occur simultaneously:

mNAV drops below 1, meaning the company’s market cap matches or falls below the value of its Bitcoin holdings.
Access to fresh capital diminishes, such as investors pulling back from buying its equity or preferred stock under favorable conditions.

Le characterized the option of selling Bitcoin in this scenario as a “last resort” to fulfill obligations like preferred dividends, not as a proactive sales strategy.

Simply put, if the stock trades at or below the Bitcoin value and the company cannot secure additional financing, then selling a portion of Bitcoin becomes the least unfavorable option to safeguard its overall structure.

Sale Condition Scenarios

Potential Triggers for Strategy’s Sale Decision

Several factors would need to align before considering the “last resort” sales strategy. Bitcoin has already seen a significant decline from its October all-time high near $126,000, dropping approximately 30% to the mid-$80,000s. Extended downturns affect the value of Strategy’s Bitcoin holdings and often exert pressure on its stock simultaneously.

The company's market cap premium above its Bitcoin holdings has narrowed following the stock's 30% to 60% decrease from earlier peaks. In mid-November, the stock was trading close to or even below the spot value of its Bitcoin, suggesting mNAV was near 1.

Strategy also relies on the ability to issue new common and preferred shares through shelf registrations and at-the-market programs. If these offerings significantly decelerate or if investors demand higher yields, it could indicate stress in funding.

Furthermore, Strategy has substantial annual commitments related to preferred dividends and debt service, with obligations reaching hundreds of millions of dollars annually. Management continues to view itself as a long-term Bitcoin accumulator, and the outlined scenarios represent a severe stress environment.

Did you know? Onchain analysis suggests that between 3 million and 4 million BTC may be permanently lost in inactive wallets, meaning a considerable segment of the supply may never return to circulation.

Implications of a Possible Sale for Bitcoin

Given Strategy's substantial holding of 650,000 BTC, the transition from a firm stance of “never sell” to the notion of “might sell under extreme stress” understandably garners attention from traders.

However, context matters:

Market Size: The daily spot and derivatives volume in Bitcoin often reaches tens of billions of dollars. Additionally, US spot Bitcoin exchange-traded funds (ETFs) have experienced significant inflows and outflows measured in the billions. A controlled sale of a fraction of Strategy’s holdings, even if substantial, would take place within a large and liquid market.
Scale and Pace of Sales: As per Le’s own comments, any sale in a stressful market would be targeted and partial, meant to cover obligations or maintain capital structure rather than a complete withdrawal from Bitcoin.
Market Pricing in Advance: Markets typically start factoring in these scenarios once they are disclosed. The recent declines in both BTC and Strategy’s stock, along with discussions around mNAV, exemplify this market behavior.

It is crucial to note that a conditional "last resort" sale scenario does not imply that large Bitcoin sales are imminent.

Did you know? In the third quarter of 2025, the average daily trading volume for crypto spot trading was approximately $155 billion, with an additional $14 billion in notional crypto derivatives traded daily on CME alone.

How to Stay Updated on Strategy's Developments

For those interested in tracking this story without reacting hastily to every headline or social media post, several key indicators can provide clarity:

Refer to Primary Sources:
- Look at US Securities and Exchange Commission filings, such as 8-K reports and prospectus updates, for information on new capital raises and Bitcoin holdings.
- Check Strategy’s press releases and their “Bitcoin Purchases” page for summaries of recent acquisitions and total holdings.
Monitor Key Metrics:
- Keep an eye on those core financial metrics mentioned above, specifically BPS and mNAV.
- Be mindful that social media often conveys sentiment rather than factual data. While memes and trending topics can signal market mood, it’s prudent to cross-reference any claims regarding forced sales or insolvency with official filings and figures.

Note: Financial circumstances, objectives, and risk tolerance differ for individuals. This content is general and shouldn’t be interpreted as financial advice or a recommendation to buy, sell, or hold any particular asset. Readers should seek guidance from a qualified financial expert tailored to their situation.