Analyst says Strategy should sell $3 billion Bitcoin

A prominent analyst has suggested that Strategy, the world's largest publicly listed corporate holder of Bitcoin, could restore market confidence by selling a significant portion of its cryptocurrency holdings to address cash obligations, even as the company continues to buy more. Zach Pandl, head of research at Grayscale, stated in a social media post on Saturday, June 27, that he hopes the company will sell at least $3 billion worth of Bitcoin to cover most of its cash needs for the next two years.

Pandl argued such a move could strengthen confidence in Strategy's capital structure. However, he said his own expectation is that the company will instead raise the dividend rate on its flagship digital credit preferred stock, STRC, by 50 basis points. He estimated this would add roughly $100 million in annual obligations over two years, a scenario he said probably does not help market confidence.

The debate centers on Strategy's substantial preferred dividend burden, cited as approximately $1.2 billion annually and driven primarily by STRC. The stock is designed to trade near its $100 par value but has been trading at a steep discount for weeks. On Friday, June 26, it fell as low...