Recently, Strategy made headlines by saying it might sell some bitcoin to meet business goals. This came as a surprise to many people due to what was previously considered a hard line of never selling. Saylor even (jokingly) tweeted things like “Sell a kidney if you have to, but keep the bitcoin.”
The reality is that bitcoin sales were always on the table for any bitcoin tax company. The specter of “never sell” is an articulation of a long-term investment philosophy based on the extreme low time preference common in bitcoin discourse. But even within this discourse, there are often cases where almost everyone agrees that selling makes sense, despite the ubiquity of the HODL meme.
The simplest reasons involve improving one’s quality of life: buying a house to start a family, paying for a trip to a place you’ve wanted to go, sending your kids to college, unexpected and serious medical bills. The list is very long. HODLing is often not that long.
For a company, the reason for doing anything (and indeed the reason for a company’s existence) is to improve shareholder value.
Consider another group of bitcoin companies that have sold. Our Q1 report highlights that Bitcoin miners sold 25,376 BTC in Q1 2026 to fund AI pivots. The value creation math is simple. Management believes their AI capex will yield better risk-adjusted returns than the bitcoin they sold. Under these assumptions, it makes sense that they sold bitcoin to fund the AI. In fact, this is reason 0: if there is a better investment than bitcoin, then it makes complete sense to sell bitcoin for it.
For Strategy – and all treasury companies focused on raising capital to accumulate bitcoin – there are clear cases where sales can create value. Let’s go through some of them.
Reason 1: Bitcoin per share
To grow Bitcoin per share (BPS) is the target of most treasury strategies. A period over period growth in BPS is called BTC Yield. BTC dividends are usually earned when bitcoin is purchased, increasing the numerator in the BPS ratio. However, it can also be achieved when shares are bought, which reduces the denominator in the BPS ratio.
If shares trade at a discount to the bitcoin they represent, selling bitcoin to buy back shares always leads to an increase in BPS. This is because the percentage change in bitcoin holdings is still greater than the percentage change in outstanding shares.
The discounting rule also applies in the case of current liabilities (such as preferred stock dividends or debt coupons) that cannot be financed with operating cash flow. If stocks are trading at a discount, then it is better to sell bitcoin to pay those liabilities. This would lead to a minor decline in BPS.
Reason 2: Cost of capital and capital raising
Because rating agencies have a lot of influence on how capital markets allocate funds, their rules and guidelines must be respected to facilitate the capital formation process. In December, we published a report on Strategy’s historical S&P credit ratings. In it, we discussed the various options for companies to receive better credit ratings, which would ultimately help their credit instruments achieve a lower cost of capital.
The cash reserve option found in S&P’s comments and discussed in our report was promptly adopted by Strategy. As of January 2026, Strategy had around $2.2 billion in cash reserves, and this has significantly reduced investors’ fears of an inability to cover preferred dividends.
In this scenario, it is perfectly okay for a company to sell some bitcoin to create the liquidity reserve to appease the market so that it can sell its credit instruments at a lower cost of capital. This seems complicated, but ultimately you have to meet your creditors where they are to get them to give you their money. There is no way around it.
Another consequence of that is bitcoin sales to retire debt. Debts are senior obligations, which reduce the attractiveness of preference shares as credit instruments. If these can be withdrawn, preferred stock may see a better cost of capital.
In the long term, a better cost of capital can be worth a lot because of compounding and the ability to service obligations on more capital. For example, it is easier to compound if you pay 9% vs. 11.5% – an extra 250 bps makes a very big difference over time. And you pay less for $1 billion borrowed at 7% than you do for $700 billion borrowed at 11%.
Reason 3: Tax
Bitcoin does not have a wash sale rule in the US (at the time of writing). You can sell it to realize a loss and then immediately buy it and reset the cost basis lower. This lets you post a loss, which acts as a tax asset. In fact, Strategy actually did this very thing back in December 2022 at the bottom of the previous cycle.
Today, this tax advantage still exists, so it’s another really good reason to sell bitcoin. But many may not see it as selling if the company buys back immediately. But a company can easily combine the tax benefit of a realized loss with an action such as a share buyback or debt repayment.
Reason 4: To prove that it is possible
Bitcoin is still quite new and this comes with a lot of FUD. Sometimes FUD is just ridiculous, but it still catches on. Strategy for selling bitcoin is one such case of ridiculous FUD: the idea is that they support the entire bitcoin market, or that if they sell the entire bitcoin balance model, it will be immediately rejected. Therefore, if they can sell 50,000 BTC and prove that nothing serious is happening to the bitcoin market or the stock, then this can dispel such notions and make the market more receptive to the company’s bitcoin balance sheet model.
Anyway, that would be the dumbest reason to do it, but sometimes people come up with dumb ideas that just need to be proven wrong. And one last point on this – the market is generally quite efficient; it is the media and the influencers who are incentivized to push sensational and ill-founded narratives out of whatever they can find. Real allocators with money rarely make decisions based on these “sources” over actual research.
Reason 5: Preferred repurchase
It’s something people don’t talk about at all. However, in the event of a real untying of instruments with variable interest, the company has the opportunity to buy back the instrument at a heavy discount to par, and thus settle obligations with very high capital costs.
This is basically to close a winning tax-free and loan-free short position on the company’s own preferred stock. For example, STRC is issued for $100. If the stock falls to $82 and Strategy sells a billion dollars of BTC to buy back STRC at $82 per share. stock, then it basically has a gain of 100 – 82 = $18 per share. STRC stock that has been shorted (issued) and then bought back. And this gain is not taxable, nor did Strategy have to borrow the stock to make this short.
STRC price action since IPO
The other important thing to note is that such a de-peg does not have to accompany a crash in the bitcoin price. If traders are heavily leveraged on STRC (which is certainly possible given what this stock is offering), a wick down can lead to stop losses and momentum algos causing a cascade of selling. In this case, Strategy can sell BTC to retire some STRC shares before they tolerate a higher dividend (here I assume they would increase the dividend to bring the shares back to par).
Conclusion
Don’t be surprised or afraid of selling bitcoin. There are plenty of cases where it is in the interests of the company and the shareholders to do so.
Bitcoin is money. Money creates freedom of choice. Choices are good when used well.