Polymarket Faces Dispute After MicroStrategy’s 32 BTC Sale

Polymarket is facing trader backlash after Strategy Inc., the company formerly called MicroStrategy, disclosed a 32 BTC sale in a Form 8-K filed June 1. The filing said the sale occurred between May 26 and May 31 and generated roughly $2.5 million in proceeds to fund preferred stock distributions calculated at $77,135 per coin.

The 32 BTC equals about 0.0038% of Strategy’s reported 843,706 BTC treasury and is the company’s first reported sale since December 2022. Analysts have pointed to the firm’s preferred stock obligations, roughly $15 billion, and a recent convertible debt buyback that reduced liquidity.

The contested Polymarket event asked, “MicroStrategy sells any Bitcoin by May 31, 2026?” The market has drawn about $85 million in total volume. Positions tied to the May 31 slice account for roughly $53.86 million of open exposure. Polymarket currently prices “No” at about 99.8 cents. Trading records show more than $20 million in positions directly affected by the resolution dispute.

Polymarket ruled that public confirmation of the sale arrived outside the market’s resolution timeframe and therefore does not qualify to settle the market. The platform reported it found no MicroStrategy filings, on-chain evidence, or contemporaneous reporting that confirmed a sale within the window while the market was live.

Polymarket uses the UMA oracle system for settlement. Under UMA’s rules, disputes that cannot be resolved internally escalate to the Data Verification Mechanism, where token holders vote within a 48- to 96-hour window to determine the outcome. The UMA vote will decide the market’s resolution.

Traders pushed back on Polymarket’s ruling. On social media, a trader posted: “This has made me lose a lot of faith in Polymarket. Its confirmed they sold before the outcome was resolved. An announcement within the timeframe isn’t even in the context.”

Market analysts said the 32 BTC sale was too small to move Bitcoin prices materially. The dispute affects which positions receive payouts: if the sale is deemed to have occurred within the window, holders who backed “Yes” would be paid; if not, holders backing “No” would collect.

The vote by UMA token holders will determine the outcome for this market. The disagreement centers on whether the timing of the underlying event or the timing of its public confirmation should control settlement for prediction markets with narrow resolution windows.