The "First Stock of the DAT" and the "Largest Diamond Hands for BTC," Strategy, has started selling coins! According to Strategy's disclosure, it sold 32 bitcoins last week at an average price of $77,135, earning $2.5 million.
Perhaps influenced by this news, BTC fell below $71,000 last night, currently trading around $70,560; at the close of the U.S. stock market, shares of crypto concept stocks plummeted, with Bullish down 7.99%, DeFi Development down 7.97%, Circle down 7.11%, Strategy down 5.85%, and Upexi down 5.04%.
Strategy's decision to stop buying BTC and its small-scale sell-off has added insult to injury in the already liquidity-constrained crypto market. In the midst of major centralized exchanges rushing into U.S. stock trading, the crypto market's bleeding continues.
Strategy's Coin Sale: Not the First Time, but Different This Time
This BTC sale is not the first time Strategy has sold coins in its history.
In 2022, due to the collapse of the then-second-largest crypto exchange platform FTX, the crypto industry experienced a cold winter, with BTC falling below $20,000; on December 22, 2022, Strategy sold 704 BTC at a price of $16,776 and quickly bought back 810 BTC at a price of $16,845 on December 24, 2022.
Strategy's coin sale this time was mainly to repay the STRC financing dividends.
As a fixed-income digital credit product launched by Strategy, STRC is considered its "flagship product." However, after repurchasing $15 billion in convertible debt last month, Strategy's cash reserves have decreased to approximately $8.71 billion, only enough to cover its estimated $1.7 billion annual preferred stock dividend obligation for about 6 months.
On May 29, STRC briefly dropped to $97.11, then rebounded and closed at $98.57.
Strategy had stated in its Q1 financial report released at the beginning of May: "If the convertible debt matures or is redeemed without being converted into common stock, the company may need to sell common stock or bitcoin to generate enough cash to meet these obligations." At that time, Strategy's Q1 financial report recorded a net loss of $12.54 billion, almost entirely from unrealized losses on BTC ($14.46 billion);
As of the end of Q1, the total cost basis of 818,334 BTC was $61.81 billion, corresponding to an average purchase price of approximately $75,537 per BTC. Recommended reading: "Strategy Q1 Financial Report: Book Loss of $14.4 Billion, Not Ruling Out Coin Sales to Pay Interest"
Of course, from a corporate operational perspective, Strategy's actions are understandable, and Michael Saylor has previously stated: "Even if 1 BTC is sold, 10 to 20 times more will be bought." Selling is to buy better.
However, from the perspective of industry confidence, Strategy's actions not only temporarily declared the "Deadlock of the DAT Treasury Model" but also greatly dampened the industry's enthusiasm for holding and buying coins, having a significant impact on short-term market trading.
After this sale of 32 BTC, Strategy still holds 843,706 BTC, valued at $60.936 billion, with an average cost of $75,699 per BTC and an unrealized loss of $2.932 billion. Last month, benefiting from the overall market rebound, Strategy's holdings once had an unrealized gain of $8.2 billion.
It is worth mentioning that on May 28, Strategy's founder Michael Saylor published a "HODL" (Hold On for Dear Life) themed article, calling on the market to firmly hold Bitcoin in the current downturn.
The "Confused Account" Behind Strategy's Coin Sale: Polymarket's "If the Official Doesn't Say it, it Means it Wasn't Sold" Farce
In addition to the matter of Strategy's coin sale itself, the "event determination farce" involving the prediction market Polymarket is also quite amusing.
Previously, in the article "Strategy Q1 Financial Report: Book Loss of $14.4 Billion, Not Ruling Out Coin Sales to Pay Interest," we also mentioned that the probability of "Strategy selling BTC before May 31" was only about 40%.
With the end of May, on June 1, Polymarket data showed that the probability of Strategy selling Bitcoin in May surged from around 12% from its recent low to 80% and then dropped to 58%, with total market transactions exceeding $16.4 million.
However, in the end, the matter was settled with a "No" outcome based on Polymarket's official ruling.
The Polymarket team stated, "We are aware of the controversy surrounding this prediction market. If a clarification announcement is needed, it will be released on June 1 at 1:00 PM Eastern Time; if no statement is made by that time, it means the Polymarket team will not provide any further clarification. Regardless of whether a clarification is issued, the order book will settle at 1:00 PM Eastern Time on the same day."
Due to the lack of an official sell-off announcement from Strategy, the event was ultimately settled as "Strategy did not sell BTC in May." This once again confirms that prediction market trades are not based on the "objective truth of the matter" but on "events defined by rules."
The Narrative of BTC as "Digital Gold" Shaken, "Safe Haven Asset" Status Dented
Following the news of Strategy's sell-off, economist, gold advocate, and cryptocurrency critic Peter Schiff posted, "Strategy sold 32 Bitcoins last week," suggesting that Strategy transitioning from the "biggest Bitcoin buyer" to a seller signaled a lack of future demand sources.
Previously viewing BTC as a "better version of gold," billionaire investor Mark Cuban recently mentioned that he had sold most of his Bitcoin holdings. He cited diminishing confidence in Bitcoin as a fiat devaluation and geopolitical risk hedge, expressing deep disappointment in the BTC "digital gold" narrative.
In a previous analysis, JPMorgan Chase also noted that the "devaluation trade" between gold and BTC was heating up, causing investors to exit safe-haven assets.
Amid successive price declines, BTC and the crypto market may have to wait for the Trump administration to "love crypto once again."
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