Strategy’s plan aims to raise liquidity without selling BTC

Strategy announced a five-part Digital Credit Capital Framework intended to ease near-term liquidity pressure while reducing the immediate need to sell bitcoin.

Pressure built after STRC, the company’s main preferred security, fell to $71.25 on June 26 from its intended near-$100 trading level as bitcoin prices declined and cash reserves shrank. Investors faced the prospect of selling bitcoin, issuing more common shares or cutting preferred dividends.

The framework establishes a 12-month minimum U.S. dollar cash reserve policy and, together with planned common-stock sales, raised cash coverage to roughly 17 months. The company authorized $1 billion to repurchase preferred stock and $1 billion to repurchase MicroStrategy (MSTR) common stock. Strategy also increased STRC’s annual dividend rate from 11.5% to 12%.

The plan includes a BTC monetization program that allows limited bitcoin sales if necessary but does not require immediate sales. Company statements say the program is intended as an optional tool to manage liquidity.

Markets reacted positively to the announcement: MSTR rose about 12.6% and STRC climbed roughly 12.2%, with STRC trading nearer $87 after the package was disclosed. Strategy holds about 847,363 bitcoin, making it one of the largest public holders.

Alex Thorn, head of firmwide research at Galaxy Digital, wrote that the overhaul provides flexibility but does not resolve structural issues permanently. He described the BTC monetization option as the most controversial element because it preserves the ability to sell bitcoin. Thorn recommended exploring ways to generate income from bitcoin holdings without selling spot bitcoin, including lending a small, segregated portion under conservative terms or using options strategies designed to harvest volatility while keeping most upside exposure.

Those alternatives carry trade-offs: lending and structured trades introduce counterparty and custody risk and can limit some upside, though they can produce recurring dollar income while leaving the bulk of bitcoin holdings intact.

Strategy still faces remaining obligations, including large preferred commitments and about $6.7 billion in outstanding convertible notes maturing in 2027 and 2028. The effectiveness of the framework will depend on future bitcoin prices, market conditions and the company’s ability to produce income from its holdings without reducing its core bitcoin position.