- Strategy adopts Digital Credit Capital Framework, authorizing BTC sales of up to $1.25 billion to build USD reserves, fund dividends, and support repurchases.
- Company holds 847,363 BTC and maintains $2.55 billion USD reserve, providing ~25.9 months of liquidity coverage.
- STRC preferred stock dividend raised to 12%; $2 billion authorized for buybacks of Digital Credit securities and common stock.
- Announcement comes as Bitcoin trades below $60,000 and spot Bitcoin ETFs see significant outflows.
Strategy Inc., the world’s largest corporate Bitcoin holder, has introduced a comprehensive Digital Credit Capital Framework that formalizes tools for active capital management while reaffirming its commitment to Bitcoin as its primary treasury reserve asset.
The framework, detailed in a press release and corresponding 8-K filing on June 29, includes a board-approved USD Reserve policy, an increased dividend on its STRC preferred stock, repurchase authorizations, and a BTC Monetization Program.
Under the new program, Strategy’s board has authorized the sale of Bitcoin to generate up to $1.25 billion for building or replenishing its USD Reserve, funding preferred stock dividends and interest payments when advantageous compared to equity issuance, and supporting repurchases. The company currently holds approximately 847,363 BTC, meaning the authorized reserve-building sales represent roughly 2.5% of holdings at prevailing prices.
Strategy’s USD Reserve stands at $2.55 billion as of June 28, covering about 17.4 months of expected annual preferred dividends and interest expense of roughly $1.76 billion. Combined with the BTC monetization capacity, total liquidity coverage reaches approximately $3.80 billion, or 25.9 months.
“Strategy remains committed to Bitcoin as its primary treasury reserve asset,” said Michael Saylor, Founder and Executive Chairman. “At the same time, Digital Credit requires liquidity, discipline, and active capital management. This framework is designed to strengthen credit quality and enable the Company to reduce expected preferred stock dividend payments when accretive.”
The company also raised the annual dividend rate on its Variable Rate Series A Perpetual Stretch Preferred Stock (STRC) to 12.00% effective July 1, aiming to support trading near its $100 stated amount. Additionally, the board authorized up to $1 billion for repurchases of Digital Credit Securities and $1 billion for Class A common stock (MSTR), with no obligation to execute and no expiration.
This development arrives amid broader market challenges. Bitcoin has been trading below $60,000, pressured by a strong U.S. dollar, ETF outflows, and thin on-chain demand. BlackRock’s IBIT and other spot Bitcoin ETFs have seen substantial redemptions in recent weeks. The prospect of potential BTC sales from Strategy, long viewed as a steadfast accumulator, contributed to caution among traders, with altcoins like Ether, Solana, and Dogecoin sliding in response.
Strategy emphasized that the monetization program is not an obligation and sales would occur only when management deems them accretive to long-term shareholder value. CEO Phong Le noted the shift toward active capital management, moving between issuance and repurchases based on market conditions.
Analysts view the framework as a pragmatic evolution for corporate Bitcoin treasuries, balancing liquidity needs with Bitcoin exposure. While some in the community expressed concerns over any sales, others see it as disciplined risk management that could enhance Strategy’s credit profile and flexibility without diluting its core thesis.
The company plans to disclose material BTC monetization activity via customary 8-K filings. MSTR shares rose following the announcement, reflecting investor approval of the enhanced capital tools.
Disclaimer: This article is for informational purposes only and does not constitute advice of any kind. Readers should conduct their own research before making any decisions.
