Strategy, formerly MicroStrategy, disclosed a substantial second-quarter loss linked to its Bitcoin holdings after selling 3,588 BTC for approximately $216 million. This marks the company’s largest Bitcoin sale in years and reveals a notable change in its longstanding strategy of accumulating the cryptocurrency without using it for liquidity.
The Bitcoin sales occurred in two phases: the first batch of 1,363 BTC sold between June 29 and 30 at an average price of $59,256, followed by 2,225 BTC sold between July 1 and 5 at an average price of $60,773. Despite these divestitures, Strategy remains a net buyer during the quarter, adding over 85,000 BTC to its treasury. However, these recent sales locked in a loss because the average purchase price of the company’s entire Bitcoin reserve is around $75,476 per coin—much higher than the prices realized in the sales.
According to blockchain analytics from Lookonchain, the sales resulted in a realized loss exceeding $55 million. Meanwhile, the total valuation loss on Strategy’s Bitcoin holdings reached $8.32 billion due to the market decline in Q2, pushing the asset’s fair value below its historical cost basis. This triggered a valuation allowance against deferred tax benefits and assets related to the unrealized losses.
In a strategic pivot, Strategy stated that proceeds from the Bitcoin sales would finance preferred stock dividend payments, covering quarterly dividends on several classes, including STRF, STRE, STRK, STRD, and the full June dividend for STRC. The sales replenished the company’s USD reserve, which stood at $2.55 billion as of early July, designed to fund preferred dividends and interest on debt.
Notably, the filing confirmed no common stock sales or share repurchases took place during the week ended July 5, highlighting a focus on maintaining current equity positions. Strategy continues to hold a sizable Bitcoin reserve totaling 843,775 BTC, acquired at a cost basis of approximately $63.69 billion.