Strategy says it may sell bitcoin to fund dividends, testing the treasury model

Strategy, the company formerly known as MicroStrategy, unveiled a capital overhaul that raises the dividend on its STRC preferred shares to 12 percent, authorizes up to 2 billion dollars in buybacks, and permits limited sales of its bitcoin to meet those obligations. For a company whose identity has been built on never selling, the disclosure is a material shift in posture.

The reassurance was aimed at investors who had begun to doubt that Strategy could cover the dividends and interest on its set of preferred and convertible instruments without selling the underlying asset. The firm centered the plan on roughly 2.55 billion dollars in dollar-denominated reserves, and its shares rose after the announcement even as bitcoin stayed below 60,000 dollars. The prospect that a large new seller could emerge also pressured the broader market, with ether, solana, and dogecoin declining.

The basic concern is the funding structure itself. A treasury that buys a volatile, non-yielding asset using dividend-bearing preferred shares must pay those dividends from somewhere, and if the share price and new issuance cannot cover the cost, the asset itself becomes the funding source. That is how a leveraged accumulation vehicle can be forced to sell when prices are falling rather than rising.

This does not mean Strategy is in distress. It does mean the company has now formally acknowledged that selling bitcoin is an option it may use, which removes the assumption that its holdings are permanently off the market.