MicroStrategy 32-BTC Sale Sparks Drop in MSTR and Bitcoin

MicroStrategy sold 32 bitcoin between May 26 and May 31, raising roughly $2.5 million to pay dividends on its STRC preferred shares, according to a Form 8-K. It was the company’s first bitcoin sale in 41 months.

The disclosure coincided with a 9.95% drop in MicroStrategy shares and an about 8.6% decline in bitcoin. After the decline, bitcoin traded near $67,206.

The 32 BTC represented about 0.0038% of MicroStrategy’s reported 843,706 BTC holdings. The company’s bitcoin position shows more than $6 billion in unrealized losses versus an average purchase price near $75,702 per coin.

MicroStrategy’s stock has lost nearly 70% over the past year, and its market capitalization has fallen from above $160 billion to about $48 billion.

ETF analyst Eric Balchunas wrote on social media that the sale was only 0.004% of the company’s holdings and described media reaction as “histrionic.” He added that ETFs and MicroStrategy should be “icing on cake, not whole cake,” and warned that bitcoin demand has become too reliant on those sources.

Crypto analyst Ran Neuner argued that STRC’s failure to hold a $100 peg this month will limit MicroStrategy’s ability to raise capital through the preferred shares and could reduce future bitcoin purchases. The company has used preferred shares in the past to fund bitcoin acquisitions and to meet dividend obligations.

Preferred shares are generally expected to trade near $100 par; when a preferred issue trades below par its effectiveness as a capital-raising tool weakens. MicroStrategy’s Form 8-K said proceeds from the 32-BTC sale were earmarked for STRC dividends.

MicroStrategy began accumulating large amounts of bitcoin as part of a corporate treasury strategy several years ago. Analysts noted that the company’s large holdings have linked MSTR stock performance to bitcoin price moves, and that rising ETF activity has increased sensitivity of both to headlines about corporate sales or financing.

The sale drew commentary about the role of large corporate holders and ETF flows in bitcoin pricing. The Form 8-K did not describe plans for further bitcoin purchases.