Strategy introduced a new Digital Credit Capital Framework this month, moving away from pure Bitcoin accumulation toward active balance-sheet management. The company sold 3,588 Bitcoin for about $216 million between June 29 and July 5 to pay preferred dividends and rebuild its cash reserve. The shift includes a board-approved USD Reserve policy requiring a minimum 12-month reserve for preferred dividends and debt interest.
The New Framework
Under the framework, Strategy revised the dividend policy for its STRC preferred security, raising the rate to 12.00%. The company also authorized up to $1.0 billion in repurchases for preferred securities — with priority on STRC — and up to $1.0 billion in common-stock repurchases. To fund or replenish the USD Reserve, Strategy authorized up to $1.25 billion in Bitcoin monetization. That's a notable departure from the company's earlier strategy of simply buying and holding Bitcoin.
Why the Sale Matters
The Bitcoin sale was small relative to daily trading volume — roughly $200-300 billion — and had minimal visible impact on BTC price. But the context is tough. Bitcoin peaked near $126,000 in October 2025 and traded around $63,000 as of July 7, 2026, a drawdown of about 50% over roughly nine months. Strategy's average Bitcoin purchase price is $75,476. An analyst base case expects Bitcoin to bottom in the low $50,000s in Q4 2026, which would leave the company deeply underwater on its holdings.
Reserve Strength
As of early July 2026, Strategy's USD Reserve stood at $2.55 billion against $1.763 billion in annual obligations. That provides 17.4 months of cash-only dividend coverage. Including the authorized $1.25 billion Bitcoin monetization, committed liquidity reaches approximately $3.8 billion, or 25.9 months of coverage. The company is clearly trying to reassure preferred shareholders that dividends won't get cut, even if Bitcoin prices stay low.
Historical Bitcoin bear markets lasted 12-14 months with drawdowns of 77-85%. If this cycle follows that pattern, the bottom could still be months away. MSTR's stock low tends to form later than Bitcoin's low, as the market needs evidence of a durable recovery. The unresolved question: can Strategy maintain its 12% dividend coverage if Bitcoin falls further, or will it need to sell more coins at a loss?
