MicroStrategy Makes Major Move: Sells 3,588 Bitcoin to Cover Preferred Dividends

A prominent corporate holder of bitcoin, Strategy, made headlines on July 6, 2026, with the disclosure in a Form 8-K of its largest bitcoin disposal to date.

The company sold 3,588 bitcoin for $216 million, a move primarily aimed at funding dividends on its preferred securities.

This transaction marks a significant shift in the company's treasury management strategy, signaling a direct acknowledgment that its dividend obligations are now a driving factor in its financial decisions.

The Chairman, Michael Saylor publicly commented on the transaction, explaining that the proceeds from the sale were used to cover second-quarter dividends for four preferred instruments: STRF, STRE, STRK, and STRD.

Additionally, the sale funded the full June payment for a fifth security, STRC, and these securities form the core of Strategy's 'Digital Credit' business, each carrying a distinct payout structure.

The senior tier, STRF, offers a fixed 10% annual dividend on a $100 stated amount, while the STRE pays 10% annually on a €100 stated amount, denominated in euros.

With the STRK provides an 8% dividend and includes a provision for conversion to common stock if shares reach $1,000.

STRC was positioned in the middle of the stack, pays a variable rate near 12%, which is reset to maintain its trading value close to its $100 par, and was recently shifted to semi-monthly payments by the board.

Which made STRD to pay 10%, is notably non-cumulative, offering the board flexibility to skip payments.

It is important to note that none of these preferred securities are directly backed by the company's bitcoin holdings; rather, they represent claims on residual assets.

As of July 5, Strategy's reserves included 843,775 bitcoin and $2.55 billion in cash. The company, known for being the largest corporate holder of bitcoin, has historically built its treasury through numerous stock and debt offerings.

Its bitcoin stack has an estimated cost basis near $63.9 billion, or approximately $75,700 per coin.

The necessity for selling bitcoin stems from a growing cash requirement, and the preferred securities pay dividends in cash, a demand that Strategy's software business does not generate enough revenue to cover.

Industry estimates, such as those from Grayscale's head of research Zach Pandl, place the company's annual dividend load at $1.5 billion.

When cash reserves dwindle, Strategy is faced with the choice of raising more capital or liquidating its bitcoin holdings.

For years, Saylor maintained a staunch pledge never to sell bitcoin, and this stance was notably broken in late May 2026 when Strategy made its first disposal since 2022, selling 32 bitcoin for about $2.5 million to fund preferred dividends.

Saylor framed this initial sale not as a retreat from bitcoin, but as a demonstration of commitment to preferred holders, asserting, “Our goal is to make STRC the best credit instrument in the world.”

The recent July sale, at 3,588 coins and $216 million, dwarfs this first step by roughly a hundredfold, underscoring the escalating need for cash.

Despite these significant sales, Strategy continues its pattern of accumulation. Following the May sale, the company acquired 1,550 bitcoin for $101.3 million, nearly 50 times the size of that disposal.

Other substantial purchases included a $2 billion acquisition in May and a $2.54 billion purchase in April.

This dual strategy involves funding dividend obligations from its existing bitcoin stack while simultaneously expanding its holdings through fresh capital raises.

The effectiveness of this approach relies heavily on access to capital markets, and when the new preferred shares and common stock can be issued to raise cash, the company can finally avoid large bitcoin sales.

However, as the July disposal suggests, when these markets tighten, bitcoin becomes the primary source of necessary funds.

Michael Saylor's social media activity, such as his recent post “Bitcoin is Digital Energy” accompanied by Strategy’s orange-dot Bitcoin acquisition chart, often precedes disclosures of new bitcoin purchases.

However, this time, the announcement was specifically about a sale, and at the time of writing, Strategy shares were down 2% in premarket trading, and bitcoin had dipped below $62,000, reflecting market reaction to these developments.