Peter Schiff: Strategy’s 843,775 BTC sales could widen losses

Strategy Inc. (Nasdaq: MSTR) sold 3,588 bitcoin on July 6 under its BTC Monetization Program, raising about $216.3 million to fund preferred dividends and bolster reserves. The company reported holdings of 843,775 BTC with an aggregate purchase price near $59.08 billion. At the time of the sale, bitcoin traded near $63,478, below Strategy’s average cost of about $75,476 per coin.

Economist and gold advocate Peter Schiff calculated the 3,588-coin sale averaged $60,196.73 per bitcoin, which implies a realized loss of about $15,000 per coin and roughly $54 million on the transaction. He wrote that selling more of the roughly 843,775 coins on Strategy’s balance sheet at similar prices would raise cumulative realized losses for the firm.

Strategy’s BTC Monetization Program allows, but does not require, the company to sell bitcoin to raise cash for reserves, dividends, debt reduction, buybacks and other corporate purposes. Company filings state the program could permit up to $3.25 billion in monetization authority, including up to $1.25 billion for reserves and $2.0 billion for share buybacks.

Michael Saylor, Strategy’s executive chair, described the program as a liquidity management tool, citing $2.55 billion in USD reserves and $1.25 billion of available monetization capacity. The company said that combination translates to about 25.9 months of coverage for preferred dividends when measured together.

Nic Puckrin, chief executive of Coin Bureau, called Strategy in “a very difficult position” because of STRC preferred dividend obligations and warned modest sales could weaken investor sentiment if bitcoin remains under pressure. Analysts at Bitfinex noted that an authorized monetization capacity for reserves could reduce the risk of emergency selling by providing a formal liquidity channel during market stress. Zach Pandl, head of research at Grayscale, wrote that the recent bitcoin sales may help restore confidence in Strategy’s capital structure and reduce short-term tail risks for bitcoin.

Before the sale, Strategy’s reported cash reserves covered roughly 17 months of preferred dividend obligations. Some analysts favor a reserve target of 24 to 36 months for greater stability. Future public filings will indicate whether Strategy continues to monetize holdings, raises fresh capital or resumes adding bitcoin to its balance sheet. Observers noted that further sales while prices remain below the company’s average cost could affect short-term market volatility.