MicroStrategy Bitcoin Sale Sparks $50M Polymarket Dispute

MicroStrategy disclosed on June 1 that it sold 32 BTC for about $2.5 million between May 26 and May 31. The timing of the public disclosure prompted a dispute on Polymarket over whether the sale met the market’s May 31 cutoff. The Polymarket question has drawn more than $50 million in trading volume and is now in final review after two proposed “No” resolutions were disputed.

The Tysons Corner, Virginia-based company, which holds more than $60 billion in Bitcoin, said the sale was its first reduction in holdings since 2022. The core question on Polymarket asks whether MicroStrategy sold Bitcoin by May 31; because the company’s confirmation came on June 1, users disagree on whether that announcement satisfies the market’s rules.

Some traders argue the sale occurred within the market’s stated window and so should resolve “Yes.” Other traders contend that public confirmation was required before the cutoff for an on-time outcome. A pseudonymous Polymarket user and “Yes” shareholder, Voidofhype, wrote in the market comments: “The rules of this market are very clearly ‘Did they sell within the timeframe’ and not ‘Is there confirmation they sold within the timeframe.'”

Polymarket posted additional context on the market’s bulletin board for UMA voters to consider: “No information from MSTR, on-chain data, or consensus of credible reporting confirmed that MicroStrategy sold Bitcoin within the market’s timeframe,” followed by “Confirmation achieved outside of the market’s timeframe does not qualify.”

Because the proposed resolution was disputed twice, the market will be decided by a vote of UMA tokenholders, holders of the native token for the UMA oracle that underpins Polymarket. The market’s rules allow the final review process to take up to two days. UMA voters will review MicroStrategy’s disclosure, on-chain transaction data and the market rules to reach a final determination.

Two other Polymarket questions asking whether MicroStrategy would sell Bitcoin by June 30 and by December 31 were resolved “Yes” without dispute. Trading volume in the May 31 market continued to grow as traders adjusted positions ahead of the UMA vote.

MicroStrategy’s announcement affected its stock. Shares fell to their lowest level in about six weeks before a partial rebound, trading down roughly 5.3% to $150.68 at one point. The decline reduced the company’s year-to-date gains.

Past disputes on decentralized prediction markets have reached final determinations through UMA votes, including a high-value market last year that required a similar voting process. The UMA vote on the May 31 market will settle positions for “Yes” and “No” shareholders once complete.