Strategy’s Bitcoin Flywheel Is Running Backwards — Can It Recover?

Strategy is selling Bitcoin and building cash as its MSTR premium weakens. Can Michael Saylor’s Bitcoin flywheel start spinning again?

For years, Strategy followed a simple—and highly successful—playbook. It raised

to buy Bitcoin (

) then used rising BTC prices and MSTR’s premium to finance even more purchases.

Now, that flywheel is running in reverse.

On Aug. 10, Strategy disclosed that it had

Bitcoin for a second consecutive week, unloading 1,690 BTC for about $109 million after selling another 1,638 BTC the week before. Both sales were executed near $64,000 per coin, well below the roughly $75,000 average purchase price of its holdings.

The proceeds are helping support another part of Strategy’s capital structure. Recent Bitcoin sales have funded repurchases of STRC, one of the company’s preferred-stock products.

Strategy has the largest corporate Bitcoin treasury. Source: Strategy

At the same time, Strategy is stockpiling cash. Its US dollar reserve has

to $4.65 billion, bolstered last week by roughly $650 million from $653 million in new MSTR share sales.

“Bitcoin is capital,” Strategy CFO Andrew Kang

in June, adding that the framework gives the company flexibility to use part of its BTC reserve to bolster its balance sheet.