Strategy Wanted to ‘Inoculate’ the Bitcoin Market—Has Its BTC Sale Backfired?

Bitcoin is off to a shaky start in June, dropping roughly 10% from $74,000 to $65,400 as headwinds pile, but the outlook remains firmly fixated on the impact of Strategy’s first BTC sale since 2022.

The Bitcoin treasury firm revealed in an 8-K filing Monday that it had sold 32 BTC the previous week, sparking heated debate on crypto Twitter.

The move marked a reversal of Strategy’s long-held “Never sell your Bitcoin” stance, with the firm’s Chair, Michael Saylor, laying the groundwork for the move last month, noting in an earnings call that “we will probably sell some Bitcoin to pay a dividend just to inoculate the market and send the message that we did it.”

Bitcoin plunged sharply on the news, before slipping to lows under $66,000 as headwinds mounted, pushing liquidations of leveraged positions in the crypto market to $1.76 billion on June 2, per CoinGlass data.

A “structural crack”

Skeptics argue that the move signaled structural distress in how Strategy plans to service its dividend obligations, fracturing the long-standing “never sell” narrative associated with its Bitcoin acquisition strategy.

It boils down to a few key recent moves: Strategy’s sale of 32 BTC and Saylor’s decision to use the company’s $1.38 billion in cash reserves to retire $1.5 billion of its 2029 convertible bonds.

Around the same multi-week window, Strategy purchased 24,869 BTC using the proceeds from its $2 billion STRC offering, effectively draining its corporate cash reserves, which critics painted as a tactical misstep since it comes right before an expensive monthly dividend payout to STRC holders.

“It’s tragicomic how bad Saylor’s recent moves have been,” crypto economist Alex Kruger tweeted Tuesday. “He tried to save STRC by signaling willingness to sell Bitcoin, and cratered it all in the process.” Kruger added that Strategy was “cornered” and that Saylor “Should have sold size if he was going to sell.”

In addition to the crypto market cascade, STRC, the company’s preferred perpetual stock, dropped from its $100 par value to $94.84, where it currently trades. Strategy’s common stock MSTR dropped 9.6% from Monday’s open to $134, slipping by another 4% Wednesday to $130, per Yahoo! Finance.

STRC’s depegging “signals a structural crack in MSTR’s leverage-heavy Bitcoin flywheel,” Ryan Yoon, senior analyst at Tiger Research, told Decrypt. “Burdened by massive dividend obligations, hedge funds feared Michael Saylor might be forced to liquidate some Bitcoin to service debt. This shattered the ‘never sell’ narrative, putting immediate downward pressure on Bitcoin.”

Not everyone views the situation as a structural failure. Andri Fauzan Adziima, research lead at Bitrue Research Institute, told Decrypt that Saylor’s actions were fundamentally sound balance-sheet decisions that were simply poorly timed during a macro-sensitive market dip.

Adziima argued that STRC’s decoupling to the $95–97 level “increases the cost of preferred funding, compresses the mNAV premium, and slows the Bitcoin yield engine,” adding that this dynamic pushes the company toward further equity issuance or potential Bitcoin sales to cover dividends. However, he noted that most institutional investors see it as “navigable leverage friction rather than a death spiral.”

Whether the strategy successfully “inoculated” the market remains to be seen. While Yoon suggests the move cracked investor confidence, Adziima argues the market is experiencing a temporary bump rather than an avalanche, expecting stabilization around $65,000 to $68,000 once the immediate noise fades.

Paul Howard, director at cryptocurrency market maker Wincent, agreed that the current friction does not signal a long-term crypto decline, though it may erode Strategy’s market share.

“The factors mentioned are all indicative of a likely decline in MSTR’s dominance,” Howard told Decrypt, noting that the emergence of diverse institutional products and derivatives means investors no longer rely solely on MSTR for exposure. For the path forward, Howard noted that while “rumors of further selling from Saylor or Mt. Gox distributions” could pressure the downside, regulatory progress like the U.S. Clarity Act could serve as an upside catalyst.

To rebuild its USD reserve and avoid large Bitcoin sales, Adziima expects Strategy’s next move will likely involve targeted MSTR equity raises combined with STRC dividend tweaks, such as moving to semi-monthly payouts.

Bitcoin is trading at around $65,560, down 3.1% over the past 24 hours, according to CoinGecko data. Users on prediction market Myriad, owned by Decrypt’s parent company Dastan, have flipped bearish on Bitcoin’s outlook, now placing a 58% chance on BTC’s next move taking it to $55,000.

Crypto investor sentiment remains depressed as traditional stocks and select altcoins soar while Bitcoin drops. The correction is exacerbated by the ongoing U.S.-Iran war and its second-order effects—including spiking energy costs and rising inflation—which have forced macroeconomic policy to hold interest rates higher for longer, dampening risk appetite.

Decrypt has reached out to Strategy for comment.