BIT Research: MicroStrategy Shifts from Largest Buyer to Seller—How Could a Potential $7.5 Billion Sell Pressure Impact Bitcoin?
- Key Takeaways: Former MicroStrategy (now Strategy), once the largest structural buyer of Bitcoin, has turned into a seller. Its ongoing Bitcoin sales, coupled with the NAV discount issue facing the entire Bitcoin treasury company sector, are reshaping market capital flows and adding pressure to short-term risk appetite—without, however, altering the view that Bitcoin's bottom is forming.
- Key Factors:
- Strategy has recently begun selling Bitcoin to replenish dollar reserves, pay preferred stock dividends, and repurchase digital credit securities, making it a marginal seller. It has accumulated approximately $62 billion in Bitcoin purchases, but analysts estimate it may still need to sell around $4.5 billion, with plans to complete this within the next 2–4 months.
- The macro environment is improving—only 3 FOMC members supported a rate hike in July, reducing the likelihood of a September hike. However, Bitcoin lacks the structural buying support seen in equities (pension allocations, corporate buybacks) and gold (central bank diversification).
- Among 109 tracked Bitcoin treasury companies, 28 have market caps below the value of their Bitcoin holdings (mNAV below 1.0), collectively holding around $3 billion in Bitcoin. The combined potential selling pressure from these companies amounts to roughly $7.5 billion at most.
- The widening NAV discount is challenging the model of using capital market financing to accumulate Bitcoin. Some treasury companies' stock prices imply a Bitcoin price of only about 0.3x spot, leaving room for valuation recovery.
- If Strategy maintains its current pace of selling roughly $100 million per week, selling pressure could persist for a longer period. Unless ETF buying returns on a large scale, short-term rebounds will remain limited, and the cycle's low is still likely to be confirmed by the end of this month or next.
Strategy (formerly MicroStrategy) was once one of the most aggressive Bitcoin buyers in the market, long known for its "never sell" stance. However, the company has recently begun selling Bitcoin to replenish its dollar reserves, pay preferred stock dividends and interest, and repurchase Digital Credit Securities. This means that one of the key structural buyers that previously underpinned the Bitcoin market is now turning into selling pressure.
Meanwhile, the macro environment is improving. At the FOMC meeting in late July, only 3 of the 12 voting members supported a rate hike, and a cooling labor market alongside easing inflation have further reduced the likelihood of a September rate increase. But unlike equities, which benefit from pension allocations and corporate buybacks, or gold, which benefits from central bank reserve diversification, Bitcoin lacks a similar stable structural buyer base. Strategy's ongoing selling has therefore become an important variable influencing short-term market risk appetite.
MicroStrategy: From Largest Buyer to Seller — Approximately $4.5 Billion in Bitcoin Still Potentially for Sale
Strategy has accumulated approximately $62 billion worth of Bitcoin, at times accelerating purchases even during price declines. Recently, however, this trend has reversed. According to analyst estimates, the company may be planning to reduce its STRC (Digital Credit Securities) balance from roughly $10 billion to $5 billion, with Bitcoin sales potentially serving as the primary funding source for this goal. If so, the company may still need to sell approximately $4.5 billion in Bitcoin, likely to be executed in tranches over the next two to four months.
While this selling scale is not enormous relative to the broader Bitcoin market, its impact is more pronounced at the level of risk sentiment. Strategy, which long acted as a structural buyer, is now gradually becoming a marginal seller. If the company maintains a selling pace of around $100 million per week, the selling pressure could persist for an extended period. Unless stronger macro catalysts emerge to drive a large-scale return of Bitcoin ETF buying, short-term rebounds may remain limited.
A deeper shift lies in the capital model of Bitcoin treasury companies. The so-called "BTC Yield" was, in large part, driven by the NAV premium of their stock prices relative to Bitcoin holdings. As this premium narrows or even turns into a discount, the model of relying on capital market financing to continuously accumulate more Bitcoin begins to face challenges.
Expanding NAV Discounts: Potential Selling Pressure from Bitcoin Treasury Companies Could Reach Up to $7.5 Billion
Among the 109 Bitcoin treasury companies tracked, 28 currently have market capitalizations below the value of their Bitcoin holdings — i.e., an mNAV below 1.0x — with these companies collectively holding approximately $3 billion in Bitcoin. For companies whose stock prices have persistently traded below asset value, selling a portion of their Bitcoin and repurchasing shares could serve as a way to narrow the NAV discount and unlock shareholder value.
This means potential selling pressure is not limited to Strategy alone. Over the coming months, the combined potential selling from Bitcoin treasury companies could reach as high as approximately $7.5 billion. At the same time, if these companies wish to attract capital again, they will need to transition from a financing model dependent on NAV premiums to strategies that generate actual returns — such as selling covered call options on Bitcoin, lending BTC, or engaging in basis trading.
However, the NAV discount also has another side. At present, the implied Bitcoin price embedded in the stock prices of some treasury companies is only around $20,000, while the spot Bitcoin price is approximately $63,000 — implying a ratio of roughly 0.3x. In contrast, in November 2024, the implied Bitcoin price embedded in MicroStrategy's stock price briefly reached 2–3 times the actual spot price. If management takes proactive measures to narrow these discounts, some companies could see significant valuation recovery potential.
Overall, Strategy's shift from a long-term structural buyer to a seller is altering the capital flow dynamics of the Bitcoin market. Over the next two to four months, the company may still sell around $4.5 billion in Bitcoin, while the total potential selling from all Bitcoin treasury companies could reach up to approximately $7.5 billion, continuing to pressure market risk appetite in the near term.
However, this shift does not change the assessment that Bitcoin is forming a bottom, and the cycle low is still expected to be officially confirmed by the end of this month or next. Moving forward, the key points to watch are when Strategy's selling is fully absorbed, whether ETF buying can make a comeback, and whether Bitcoin treasury companies under NAV discounts can re-release value through proactive capital strategy adjustments.
Parts of the above views are sourced from BIT on Target. Contact us to access the full BIT on Target report.
Disclaimer: Markets involve risk, and investment requires caution. This article does not constitute investment advice. Digital asset trading may involve significant risk and volatility. Investment decisions should be made after carefully considering personal circumstances and consulting with financial professionals. BIT is not responsible for any investment decisions made based on the information provided in this content.
