The strategy should have said that selling coins is not ruled out

Author: Chloe, ChainCatcher

Yesterday, Strategy announced its Q1 2026 financial report, showing a net loss of $12.54 billion for the quarter, stemming from unrealized losses due to the decline in Bitcoin. At the same time, Michael Saylor stated in the meeting: "We may sell some Bitcoin to pay dividends, as a way to inject a shot of adrenaline into the market and convey that we have achieved this goal." CEO Phong Le emphasized in the same meeting: "We will sell when it is beneficial for the company to do so."

Saylor has completely reversed his belief of "never selling Bitcoin" that he held for the past few years.

As soon as the news broke, MSTR plummeted over 4% in after-hours trading, and BTC also fell below $81,000. Strategy currently holds 818,334 BTC, with an average cost of about $75,537, totaling approximately $66.7 billion, accounting for about 4% of the global circulating BTC.

When the world's largest corporate BTC holder declares that "selling Bitcoin is an option," the crypto market brings up the question that has often been raised in the past: If Saylor really starts selling Bitcoin, how will the market react?

The Tug-of-War Between Bulls and Bears: Is Selling Bitcoin a Strategic Move?

To answer the impact of selling Bitcoin on the market, we first need to clarify one thing: Why did Saylor choose to pivot at this moment? There are two completely different interpretations in the market, and these interpretations will lead to entirely different price expectations.

From the bullish perspective, this is a "preemptive strike." Based on Saylor's own statements, as well as analyses from institutions like Bernstein and in-depth interpretations of the Q1 earnings call by The Crypto Times, Saylor is addressing those who are bearish on Strategy. In other words, he is attempting to eliminate the market's long-standing doubts about Strategy's cash flow by proactively selling a small portion of Bitcoin.

Strategy has to pay an annual dividend of 11.5% on its STRC preferred stock, totaling about $1.5 billion a year. However, the software business revenue is almost negligible, and Bitcoin does not generate any cash flow, so it will eventually be forced to continuously issue more MSTR common stock to raise cash for dividend payments. This excessive issuance of stock will dilute existing shareholders' equity, crush MSTR's stock price, and trigger a chain reaction. This scenario has been the primary concern of bears in the past.

Strategy wants to prove that it can pay dividends directly from its BTC holdings and can stop issuing common stock at any time. Saylor also stated in the conference call: "If you are bearish on us and your argument is that this company must sell stock to pay dividends, then I would love to slap you in the face."

Additionally, he revealed that Strategy currently only needs BTC to rise by 2.3% annually for its existing holdings to indefinitely cover all STRC dividend obligations, without needing to sell any common stock. Considering that historically, BTC has averaged much more than a 20% increase per year, this 2.3% is almost an impossibly low threshold.

At the same time, Bernstein analyst Gautam Chhugani echoed this perspective in a report at the end of April, stating that "the best days for crypto are still ahead," and pointed out that STRC is a "high-yield, low-volatility" instrument that is attracting yield-seeking funds and reinvesting them into more BTC purchases. Bernstein believes that the STRC mechanism itself is the engine for the next round of BTC price increases, more critical than the inflow from spot ETFs.

From this perspective, Saylor's so-called "selling Bitcoin" may be small-scale, symbolic, and planned, rather than panic selling. If this narrative is accepted by the market, the market could even strengthen due to the "elimination of uncertainty."

Moreover, from a more macro perspective, Saylor's proactive mention of selling Bitcoin may be a market stress test. If Strategy never tests the market's reaction to its selling Bitcoin, and always treats "selling Bitcoin" as a taboo topic, that would be the biggest hidden danger for the market. Because if one day Strategy is really forced to sell urgently, the market has never "rehearsed" how to digest this shock, and the reaction could be more panic-driven.

It can be said that rather than letting "whether Strategy will sell Bitcoin one day" become a ticking time bomb hanging over the crypto market, it is better to let it defuse the fuse now.

Is Strategy a Standard Feature of a Ponzi Structure?

However, the bearish perspective is completely opposite. Economist Peter Schiff labeled Strategy's entire capital structure as "Bitcoin Ponzi" back in March. He believes that Strategy's main financing tool, STRC, is a preferred stock deliberately designed to stabilize its price around a face value of $100, with an annual dividend of 11.5%, to attract conservative institutional funds, which are then used to buy BTC.

Peter Schiff stated that when the market declines and STRC faces pressure to drop below the $100 face value, the only tool Strategy has to support the price is to increase the dividend yield, which is why the yield has been pushed from 9% at its issuance last July to 11.5%. Currently, the total annual dividend payment is about $1.5 billion, and with each new round of STRC issuance, this bill will continue to grow.

This $1.5 billion is the core of Schiff's concern. He believes that software business revenue is negligible, BTC does not generate cash flow, and the money to pay dividends can only come from the continued issuance of new STRC financing: using new investors' money to pay old investors' dividends, which is the standard feature of a Ponzi structure.

Once cash reserves are exhausted, currently about $2.25 billion, which can support 18 months, Saylor will have only two options: either declare a dividend default, which would immediately destroy STRC and trigger a confidence collapse; or start liquidating BTC for dollars to pay dividends, which is exactly what is happening now.

Additionally, the Financial Times used a sharper metaphor: Jenga. It compared the STRC flywheel to MBS before the 2008 financial crisis: back then, the demand for "safe AAA-rated securities" drove up housing prices, and rising prices "validated" the safety of these securities, until the prices stopped rising, and the entire structure began to fail.

The Financial Times also pointed out a legal detail that is easily overlooked: although STRC is marketed as "over-collateralized by Bitcoin," it is actually an unsecured security legally, with no priority claim on Strategy's BTC. If Strategy were to enter liquidation, STRC holders would have to wait behind $8.2 billion in convertible bonds and $1.3 billion in STRF preferred stock, and only after these $9.5 billion claims are satisfied would it be STRC holders' turn.

K33 research director Vetle Lunde also issued a similar warning: STRC holders face an "asymmetric structure where upside is capped by dividends, but downside risk is real"; if this instrument consistently trades below par, its behavior will resemble credit risk rather than stable income.

From this perspective, Saylor's claim of "injecting a shot of adrenaline into the market" may actually be the first signal that the Ponzi structure cannot hold up.

Once the market begins to recognize this trend, Strategy will lose its ability to buy BTC through stock issuance, ultimately being forced into a true selling cycle. Given that Strategy holds 4% of the global circulating BTC, if it shifts from a major buyer to a major seller, the impact on BTC prices will be unprecedented in the current market.

It is worth noting that Polymarket data shows that the market is currently in a state of indecision. Before the Q1 earnings report, Polymarket had only about a 10% bet on "Strategy selling any BTC within 2026." However, as soon as Saylor's comments about selling Bitcoin were made, the probability immediately soared to 48%. At the same time, Polymarket set the probability of BTC reaching $100,000 by the end of the year at 42%, while the probability of BTC dropping back to $55,000 before the end of the year was at 55%. The entire market is clearly struggling to find direction between "strong rebound" and "revisiting deep waters."

Conclusion

So, if Saylor sells Bitcoin, will the crypto market plummet?

From the numerical perspective, if Strategy only sells a small amount of BTC, the impact is not significant. Assuming it only sells BTC equivalent to its dividend obligations, about $1.5 billion, this scale is relatively small compared to Strategy's past frequent purchases of BTC, so "small-scale selling" will not have a strong downward impact on prices. Moreover, if selling Bitcoin is "small-scale and announced," the market is likely to absorb it.

However, the impact on market sentiment is another matter. For the past six years, the crypto market has defaulted to Strategy as a representative of the belief that it would never sell. The BTC it bought was equivalent to permanently disappearing from circulation and would not return to the market as selling pressure. This assumption itself is an important part of the bullish narrative for BTC: "The largest institutional holder guarantees not to sell," is one of the implicit premises for the structural bullishness of the market. When this premise disappears, the market must begin to recalculate a variable that has never been quantified, namely the fact that "Strategy becomes a seller."

Finally, a deeper impact lies in whether it will affect other DATs. Strategy's success has spawned over 100 publicly traded companies replicating its model, but currently about 40% of the market valuations are already below the actual value of the BTC they hold. If even Strategy starts selling Bitcoin, those mNAVs that have long fallen below 1 and cannot continue to finance through stock will have little reason not to follow suit. A wave of collective deleveraging and selling pressure from DAT companies could truly cause a downturn in the entire market.