The REAL Reason Michael Saylor Is Selling Bitcoin

In February 2025, with Bitcoin sliding under  $85,000, Michael Sailor posted a line that   became scripture for many diehard Bitcoin holders  out there. Sell a kidney if you must, but keep   the Bitcoin. Well, fast forward to today and it  appears his own company has ran out of kidneys   because they are selling thousands of Bitcoin.  Now, the heated argument you'll find everywhere on   X about whether he ever really meant what he said  is the wrong argument because what sailor once   stopped mattering months ago. Strategy currently  holds a little over $840,000 BTC. But sitting on   the other side of that pile is an obligation that  arrives every single month in dollars whether   Bitcoin is at $126,000 or at $63,000. It doesn't  negotiate. It doesn't take a view on the 4-year   cycle. and it does not care about conviction. The  main reason this matters so much beyond just one   company is that roughly 200 public companies now  hold over 1.2 million Bitcoin between them and a   lot of them built the exact same thing with the  same kind of obligation. So today we're going   to break down what turned Sailor into a forced  seller, why the funding machine that used to pay   for it stopped working, and how the entire digital  asset treasury category is changing forever.   My name is DC and this is the Coin Bureau. So,  let's start with the thing that actually drives   all of this because it isn't depth in the way many  are interpreting it. Strategy has five publicly   traded securities sitting above its common stock  MSTR. There's Strike, Strife, Stride, Stretch,   and a Eurodenominated one called Stream, listed  in Luxembourg. Most of these are what is known   as perpetual preferred. And if that phrase means  nothing to you, don't worry. You're not alone.   A perpetual preferred is a security that pays you  cash forever. It never matures, so the company   never gets a date where the obligation ends.  Most of them don't convert into stock, so it   never turns into equity, just pays and pays and  pays. Strike carries an 8% dividend. Strife and   Stride carry 10%. And then there's Stretch, which  is the one getting so much attention. Stretch or   STRC launched in July 2025 at a 9% rate, raising  roughly $2.47 for $7 billion with a $100 par value   and a promise that it would trade around par.  Stretch has a ratchet built into it, meaning   when the price sags below $95, the dividend rate  steps up in half% increments to pull buyers back   in. Each one of those steps adds an estimated $53  million to the annual bill. So that's $53 million   every time the market says no. By July of this  year, that 9% had climbed to 12% and payments   moved from monthly to semionthly. The thing to  bear in mind here is that this is supposed to be   a one-way system. Management has said it will  not lower the rate until stretch demonstrates   sustained healthy trading near $100 a share. So,  the ratchet goes up and comes down only on good   behavior. However, recent reporting suggests the  board moved in June to make any further increases   discretionary rather than automatic. So quite  how one way this mechanism still is is a bit   disputed. And what's more, it isn't even working.  On the 31st of July, Stretch closed at around $89,   11% below the par value it was designed to hug.  But that is just noise unless we look a bit closer   at the business. In the second quarter of this  year, Strategy paid $400 million in preferred   dividends. In that same quarter, the software  side of strategy, the actual company with actual   customers, generated $122 million in revenue.  The dividend bill was more than three times   the entire top line. That $122 million is revenue,  not profit. Annualized, the preferred and interest   obligations run somewhere between 1.2 billion and  $1.7 billion, depending on what you count. A year   earlier, the preferred dividend line was $49  million a quarter. So it grew roughly eightfold   in just 12 months. A fixed cash bill denominated  in dollars sitting on top of an asset that seems   to do whatever it likes. So you might be wondering  if that bill was always going to exist, what used   to pay it? Well, strategy stock used to trade at a  hefty premium to the Bitcoin on its balance sheet.   That's the MNAF, the ratio of market value to the  value of the underlying coins. And at the 2021   peak, it hit six times during the late 2024 mania  over three. So, the company issued new shares at   that inflated price, bought Bitcoin with the  proceeds, and every existing shareholder ended   up owning more Bitcoin per share than they did the  day before. This is dilution that effectively made   everyone richer, at least while things were  trending up, and it worked for years. Over   the past eight quarters, the company increased  its share count by around 74%. This year alone,   it raised more than $17 billion by selling new  shares. But there's a threshold that determines   just how much strategy can rely on this supposedly  infinite money glitch. Above net asset value,   issuing stock creates value for existing holders.  Below it, issuing stock destroys it. So there   is no in between and no amount of conviction  can change that reality. On a basic reading,   market cap divided by the value of the coins.  Strategies MNAV is now roughly 68. That's from   2x as recently as 2 years ago. Now the company's  numbers will tell you that MNAV is slightly above   one and it is technically right because its  own formula holds stepped and preference stock   in at face value rather than market value which  inflates the result and in July strategy redefined   the metric entirely with its glossery now stating  that any amnav calculated before the 23rd of July   isn't comparable to the new one. So the chart that  justified the entire premium has been retired. So,   let's look at something interesting here. In the  August 2025 earnings tech, the company made a   promise. It would not issue MSTR below 2.5 times  MNAV except to pay interest and dividends. Since   that slide, it has sold 14.3 billion of stock,  all of it below that line. And management has   acknowledged it needs to be above roughly 1.22  times before issuance is accretive again. So,   the funding source rotates. When the market stops  handing you free money for your premium, the only   asset left to fund the coupon is the treasury.  Bitcoin is being sold to pay the preferred holders   their cash. And Bitcoin is also being sold to buy  back the preferred themselves, defending the price   so the ratchet doesn't trigger again. In June, the  board authorized a $1 billion repurchase program   across the preferred stack. So, coins leave the  balance sheet to prop up the securities that exist   to buy coins. As awkward as it sounds, that's how  it works. But that gives us something specific   to watch out for when interpreting Strategy's  announcement on how it's allocating capital. So,   watch out for Strategy selling Bitcoin and  issuing equity in the same reporting week. So,   if a company is a net buyer with a healthy funding  channel, those two things shouldn't be happening   together. When they do, it's telling us that  the Treasury is being used as a working capital   account. But of course, keeping up with weekly AKs  and making sense of three different definitions   of the same ratio, that's a full-time job. Most  people simply don't have time to research all of   that. So, we made it a lot easier. Right here on  YouTube, you can join the Coin Bureau Club light   plan. You'll get daily market updates across both  crypto and traders read on the best opportunities   out there, and curated updates with only the  detail that's actually important. Just tap the   join button below this video to get started.  Okay, back to the filings. As I record this,   the most recent disclosure saw Strategy sell  1,638 BTC at an average price of just under   64K for about $105 million. Of that, $52 million  went to preferred dividend distributions. Another   $52 million went to buying back stretch shares.  So, the proceeds split almost exactly in half   between paying the coupon and defending the  coupon. In the same week, the company sold over   3 million shares of common stock for $290 million,  and $250 million of that went straight into the   dollar reserve. Bitcoin sold an equity issued in  the same week. That left holdings at a little over   $842,000 Bitcoin against a cost basis of around  $75,400 each. And that was the third such event   this year. 32 coins in May, the first standalone  reduction since 2022. then 3,588 coins for around   $216 million at the start of July. Roughly 5,258  Bitcoin gone year to date. So this is the pattern   doing exactly what the structure requires. And it  is very much not one man's mistake, which is where   this gets bigger than just strategy. Bloomberg  tracked a basket of digital asset treasury stocks   this year and found a median decline of 43% while  Bitcoin itself fell around 27%. A large share of   the biggest treasury companies now trade at  or below the value of the coins they hold.   Metaplanet in Tokyo sits around.72 on a basic  MNAF, down roughly 77% over the year and it has   adopted a policy of not issuing common stock below  one times NAF which is the threshold rule written   into corporate policy. Semilar Scientific is the  clearest example of all because Semler doesn't   exist anymore. Strive announced an acquisition  in September 2025 at a 210% premium. By December,   the implied value of that deal had fallen  roughly 76%. The merger completed in January,   Semler delisted and the diagnostics business it  was built on now generates about $1.37 million   in revenue next to the treasury. Satsuma in  London put it to a shareholder vote in July   and liquidated all 668 of its coins. Bit deal sold  its last 948 BTC in February to pivot to AI. These   are all different management teams in various  jurisdictions worldwide, but they all saw the same   outcome because the design flaw is universal. Any  company carrying fixed cash obligations against   a volatile asset eventually sells that asset into  weakness, which as you know is typically the worst   possible time to be selling it. Vanx Matthew  Saigel has gone even further and proposed that   treasury companies write a living will into their  prospectus. A clause forcing management to unwind   and hand the cash back if the stock trades below  nav for long enough. And if you've been around in   crypto for a while and any of this seems familiar,  it should. Grayscales Bitcoin Trust traded at a   34% discount to its holdings on the 17th of June  2022 for one simple reason. There was no way to   redeem the underlying at par. That discount only  closed when it became an ETF in 2024. Now, before   anybody gets ahead of themselves on the state  of Strategy's business and the risk it poses to   Bitcoin, let's be fair about what this is and what  this isn't. Strategy is not going bankrupt no time   soon. The dollar reserve, as I make this video,  now stands at $4 billion, which covers roughly 2   years of dividends and interest. Total depth is  around $6.7 billion and has fallen roughly 18%   this year, including a $1.5 billion repurchase of  convertible notes at an 8% discount. Strategy saw   an $8.2 billion quarterly loss, but that's almost  entirely non-cash fair value markdown on its   Bitcoin holdings, not money going out of the door.  We can also look at what analysts actually have to   say about Strategy's common stock. City cut its  target from $260 to $136. benchmark went from   520 to $435. Barclays trimmed from $130 to $125.  So the market might be adjusting price targets,   but those prices are still higher than where  the stock is trading today. And not one of these   analysts is saying the company is going under.  In other words, what we are seeing right now is   stress on a structure, not the end of a company.  But the thing you need to remember is that if   you own MSTR, you are not owning Bitcoin. You're  owning a piece of a capital allocator that focuses   primarily on Bitcoin. And there is one other thing  you should be aware of if you're touching MSTR,   but it's not some scary headline sale number.  It's index exclusion. MCI ran a consultation   on kicking out companies whose digital assets  exceed half their total assets. And in January,   it declined to do it. but it simultaneously open  a broader review into non-operating companies,   noting that some of these firms look a lot like  investment funds. Betas on Poly Market currently   price around a 37% chance of MSTR leaving the  MSEI index by year end. And if that happens, it   would trigger a wave of force selling from index  tracking funds with no regard for price and no way   for strategy to stop it. So be sure to monitor  those polyarket dots. But let's shift our focus   back to strategy selling Bitcoin. Sailor's defense  posted on the 3rd of August was that when he says   never sell, he speaks as one hodler to another.  That he has never sold a single Satoshi of his   own and that strategy is not his wallet. Although  there is evidence to the contrary when it comes   to sailor saying strategy wouldn't sell. It really  doesn't matter. The important distinction to make   is that the rapper is under some strain, but the  asset isn't. Bitcoin has no coupon, no preferred   holders, no ratchet, and nothing due on the  first of the month. The entire Treasury company   era was a bet that a company could be a better  way to own Bitcoin than simply owning Bitcoin.   And that specific claim is what's unwinding right  now. Nothing more, nothing less. But what do you   think? Is this a temporary squeeze that resolves  the moment Bitcoin turns? Or is there something   far greater to worry about here? Please get highly  opinionated in the comments and let us know.   And if you want to understand how these treasury  companies were built in the first place and why   the premium existed at all, then definitely check  out our full breakdown right over here. As always,   thanks so much for watching and I'll see  you again very soon. This is DC signing off.