Strategy Sold Bitcoin Below Cost to Prop Up Its Preferred Stock

Strategy sold 1,690 bitcoin for $108.6 million between August 3 and August 9, and disclosed it in an SEC filing published this morning. The average sale price was $64,262 a coin. Strategy's own average acquisition cost across its entire stack is $75,385. That gap is the story: for the first time, the largest corporate bitcoin holder on earth booked a loss on bitcoin, and it did so to buy back a security it issued itself.

Every dollar of the $108.6 million went to repurchasing 1,152,020 shares of STRC, the variable-rate perpetual preferred stock Strategy has spent months trying to hold at par. Not to fund operations. Not to cover a dividend shortfall out of general cash. The proceeds were ring-fenced to one instrument.

RelatedStrategy's mNAV Falls Below 1, Forcing a Bitcoin Pivot

• 1,690 BTC sold between August 3 and August 9 for $108.6 million, at an average realised price of $64,262 per coin.
• Sold roughly 15% under cost. Strategy's blended acquisition price is $75,385, so the sale crystallised a loss of about $11,100 per coin.
• All proceeds went to STRC. 1,152,020 preferred shares were repurchased, a direct par-defence operation.
• The treasury is now 840,447 BTC, bought for $63.36 billion in total. Separately, Strategy raised $653.1 million selling MSTR stock and lifted its dollar reserve to $4.65 billion.

Why would a bitcoin company sell bitcoin at a loss?

Because STRC is not a normal preferred stock, and the thing it promises is not really a yield. It is a price.

STRC carries a $100 par value and pays a variable monthly dividend that has been running in the 11.5% to 12% annualised range. The variable part is the whole design. Strategy resets the rate each month with the explicit goal of keeping STRC trading near $100. If the shares slip below par, the company raises the payout to pull buyers back in. That works until it doesn't. Raising the rate makes every future month more expensive, and it signals stress to exactly the investors you are trying to reassure.

When the dividend lever gets too costly to keep pulling, one lever remains: go into the market and buy the shares yourself. That is what the August filing records. Strategy ran out of cheap ways to hold STRC at par and switched to the expensive one.

The awkward part is where the money came from. Strategy raised $653.1 million from MSTR share sales in the same window and parked $650 million of it in its dollar reserve. It had cash. It chose to fund the STRC buyback with bitcoin instead, which reads as a deliberate signal that the reserve is being protected for something else.

How big is the loss, really?

On this tranche, about $18.8 million. That is rounding error against a $63.36 billion position, and anyone framing it as an existential event is overreading it.

The significance is behavioural, not arithmetic. Strategy's entire investor pitch since 2020 has been that it is a permanent, price-insensitive bitcoin buyer. Michael Saylor spent years saying the company would never sell. The company has now sold, at a loss, and the disclosed use of proceeds points at its own capital structure rather than at any operating need. A commitment that bends under a preferred-stock obligation is a different commitment from the one shareholders were sold.

What is Solstice shipping on Solana, and is it really a first?

On the same day the filing landed, a Zug-based DeFi protocol called Solstice Finance launched strcUSX on Solana, a structured product that splits indirect STRC exposure into two tranches. The senior tranche, SR-strcUSX, targets around 7% a year and gets paid first. The junior tranche, JR-strcUSX, targets north of 20% APY and absorbs losses first. Holders can redeem after a seven-day unlock or exit immediately for a fee.

Solstice describes it as the first STRC-linked instrument on Solana. That claim needs a qualifier. Ondo Global Markets listed tokenized STRC on Ethereum, BNB Chain and Solana on May 5, 2026, roughly three months earlier, offering direct economic exposure at around 11.5%. The defensible version of the Solstice claim is narrower: it is the first tranched structured product built on STRC on Solana, not the first STRC exposure of any kind. If you are evaluating this, the distinction matters, because a tranche is a different risk object from a wrapper.

RelatedStrategy Became Bitcoin's Buyer of Last Resort

Read the two events together and the picture gets uncomfortable. The issuer is selling bitcoin below cost to hold STRC at par on the same day a DeFi protocol starts offering 20% on the riskiest slice of that same instrument. A junior tranche is levered exposure to an asset whose sponsor is visibly spending money to keep its price from moving. Whatever else that is, it is not a 20% yield on a stable thing.

What does it mean for MSTR shareholders?

The signal for investors is a change in the order of priority. Strategy has multiple preferred instruments outstanding and a bitcoin treasury that no longer trades above its net asset value in the way it once did. Once mNAV sits at or below 1, issuing new equity to buy bitcoin stops being accretive, which removes the mechanism that made the whole flywheel work. We covered that turn when it happened in Strategy's mNAV falling below 1.

What is new here is the sequencing. Bitcoin is now a funding source for obligations to preferred holders, and preferred holders sit ahead of common shareholders. The $4.65 billion dollar reserve is the number worth watching more than the coin count: it is the buffer that determines how long Strategy can service and defend its preferred stack without touching the treasury again. This is analysis, not investment advice, but the question a careful reader should be asking is how many more months of par defence that reserve funds, and what happens to the buyback if bitcoin stays under $65,000.

1. Jul 2025STRC IPO closes at $2.521 billion Largest US IPO of 2025
2. May 5 2026Ondo lists tokenized STRC on Solana, Ethereum, BNB ~11.5% yield, non-US investors
3. Jul 2026Strategy's mNAV falls below 1 Equity-funded buying stops being accretive
4. Aug 3-9 20261,690 BTC sold at $64,262 average Below the $75,385 cost basis
5. Aug 10 2026Filing discloses the sale; Solstice launches strcUSX Same day, opposite directions
6. Sep 2026Next monthly STRC dividend reset The tell for whether par defence is working

Our take

The dollar figures here are small and the precedent is not. Strategy did not need to sell bitcoin to raise $108.6 million; it raised six times that from equity in the same week and put it in the bank. Choosing to fund a preferred buyback with coins instead of cash was a decision, and decisions disclose priorities more reliably than press releases do.

The Solana product launching the same afternoon is the part worth sitting with. Structured credit built on an instrument whose issuer is spending capital to hold its price steady is not obviously a yield opportunity. It might simply be a way to get paid 20% for standing closest to the thing that breaks first.

Original analysis by GenZTech. Reported from the August 10, 2026 SEC filing and Solstice Finance's launch materials. Source: CoinDesk.