Simply put
- Strategy Inc. has begun selling Bitcoin to fund dividends on its preferred stock, a shift from its long-held “never sell” stance that has spooked the market.
- Standard Chartered maintains its forecast for Bitcoin at the end of 2026 at $100,000, insisting that the sell-off is “mainly noise” and due to communication issues.
- Bitcoin is trading around $64,440, up 3.8% for the week but down 42% for the year, but countless traders believe it’s unlikely they’ll have $1 million in Strategy. $BTC this year.
Strategy changes from hoarding Bitcoin A new note from Standard Chartered says that selling Bitcoin to pay dividends on preferred shares has “clouded” the short-term outlook for Bitcoin, but still urges investors to avoid Bitcoin.
Last week, Bitcoin treasury firm Strategy sold 3,588 coins. $BTC Approximately $216 million was paid between June 29 and July 5 for preferred stock dividends and cash reserve replenishment, leaving a balance of $843,775. $BTC. It happened after a mere 32 token sale $BTC In early June, it sparked the worst week since 2022.
Standard Chartered’s Jeff Kendrick said in a note issued on Friday that the bank views the sale as “more noise than a signal” about Bitcoin’s medium-term direction, leaving its end-2026 forecast unchanged at $100,000.
Strategy mNAV problem
Strategy had been running a simple machine for years. As long as the company’s stock trades significantly above the value of the Bitcoin it owns (a premium measured by an index called mNAV), the company can issue or buy more stock. $BTCand increases both the valuation of Bitcoin itself and the price of Bitcoin. That premium has evaporated.
Standard Chartered has an mNAV of around 1 based on enterprise value, while equity-based trackers have it lower. Bitcoin Treasuries’ stock price is about 0.7x the value of Bitcoin on a diluted basis, a discount of about one-third. In any case, the machine stopped. strategic $BTC The stack, purchased for $63.7 billion, is worth about $54 billion at current prices, and the company posted an $8.3 billion loss on digital assets last quarter, almost all of which went unrealized.
Backing of STRC dividend
According to Standard Chartered, since the accumulation model has stalled, Strategy is repurposing its Bitcoin as collateral for STRC. STRC is a perpetual preferred stock known as Stretch, which pays a 12% annual dividend and has about $10 billion outstanding.
The company’s stock is designed to trade around its $100 par value, but it fell to an intraday low of $71.25 on June 26 after the company revealed its first Bitcoin sale earlier that month. Subsequent price action suggests that “the market is not yet fully convinced of this pivot,” Kendrick wrote. under “”$BTC The Monetization Program announced on June 29th allows Strategy to raise up to $1.25 billion by selling Bitcoin to fund its dividend.
Kendrick argued that clear communication is “key to reassuring the market that wholesale is unlikely,” which should pull STRC back toward its $100 par value and, in turn, ease pressure on Bitcoin. He wrote that the stock is “significantly overcollateralized” by the Bitcoin underlying it, so effective signaling could eliminate the need for the strategy to sell any more. The analyst noted that the reserves behind the dividend currently hold $2.55 billion, which equates to about 1.5 years of coverage.
what the market thinks
Bitcoin began trading around $64,440 on Friday, up 3.8% for the week, but is down 42% over the past year and about 49% below its October 2025 record of $126,080, according to CoinGecko data.
Traders are questioning whether the strategy buying spree will resume in earnest. Markets on Myriad, a prediction platform owned by decryptionDastan’s parent company may hold more than 1 million shares $BTC Approximately 13% before 2027. Strategy currently holds 843,775 coins, which is over 4% of all Bitcoins that will ever exist.
