Author: Chloe, ChainCatcher
Yesterday, Strategy announced its Q1 2026 financial results, reporting a net loss of $12.54 billion, stemming from unrealized losses due to the decline in Bitcoin prices. At the same time, Michael Saylor stated in the conference, "We may sell some Bitcoin to pay dividends, to give the market a boost and to convey that we have achieved this goal." CEO Phong Le emphasized at the same conference, "We will sell when it benefits the company."
Saylor has completely reversed his "never sell coins" belief that he has upheld for the past few years.
Following the news, MSTR plummeted by over 4% in after-hours trading, and BTC also fell below $81,000. Strategy currently holds 818,334 BTC, with an average cost of approximately $75,537, a total value of approximately $66.7 billion, representing about 4% of the global circulating BTC.
When the world's largest BTC holder announced that "selling coins is a permissible option," the crypto market brought up the question that has been frequently asked in the past: If Saylor really starts selling coins, what will happen to the market?
In the tug-of-war between bulls and bears, is selling coins a strategic move?
To answer the question of the impact of selling coins on the market, we must first understand one thing: Why did Saylor choose this particular time to reverse course? There are two completely different interpretations of this in the market, and these two interpretations lead to completely different price expectations.
From a bullish perspective, this is seen as a "preemptive strike." Based on Saylor's own statements, analyses from institutions like Bernstein, and The Crypto Times' in-depth analysis of the Q1 earnings call, Saylor is targeting those bearish on Strategy. In other words, he's attempting to dispel long-standing market concerns about Strategy's cash flow by proactively selling a small portion of Bitcoin.
Strategy pays 11.5% dividend annually on its STRC preferred stock, totaling approximately $1.5 billion per year. However, software revenue is negligible, and Bitcoin generates no cash flow. Therefore, sooner or later, Strategy will be forced to continuously issue new MSTR common stock to raise cash for dividend payments. This aggressive stock issuance will dilute existing shareholders' equity, crush MSTR's stock price, and trigger a chain reaction. This scenario has been the primary concern of short sellers in the past.
Strategy wants to prove that it can pay dividends directly from BTC holdings and can also stop issuing common stock at any time. Saylor also said in the conference call: "If you are a bear on us and your argument is that this company has to sell stock to pay dividends, then I would be happy to prove you wrong."
Furthermore, he revealed that Strategy currently only needs BTC to rise by 2.3% annually for its existing holdings to cover all of STRC's dividend obligations indefinitely, without needing to sell any common stock. Considering that BTC's historical average annual increase has far exceeded 20% over a longer period, this 2.3% is an extremely low threshold.
Meanwhile, Bernstein analyst Gautam Chhugani echoed this perspective in a report at the end of April, stating that "the best days for crypto are yet to come," and pointing out that STRC is a "high-yield, low-volatility" tool that is drawing in yield-seeking funds and circulating them to buy more BTC. Bernstein believes that the STRC mechanism itself is the engine of the next round of BTC price increases, more crucial than inflows into spot ETFs.
From this perspective, Saylor's so-called "selling" might be small-scale, symbolic, and planned, rather than a panic sell-off. If this narrative is accepted by the market, the price might even strengthen due to the "elimination of uncertainty."
Furthermore, from a broader perspective, Saylor's proactive move to sell cryptocurrency might be a deliberate market stress test. The biggest potential threat to the market is if Strategy never tests the market's reaction to its Bitcoin sales and always treats "selling cryptocurrency" as a taboo subject. Because if Strategy were ever forced into an emergency sell-off, the market, having never "practiced" how to absorb such a shock, would react with far more panic.
It's better to defuse the fuse now than to let the question of "whether Strategy will sell its tokens someday" become a ticking time bomb hanging over the crypto market.
Is strategy a standard characteristic of Ponzi schemes?
However, the bears have a completely different perspective. Economist Peter Schiff called Strategy's entire capital structure a "Bitcoin Ponzi scheme" as early as March. He believes that Strategy's main fundraising vehicle, STRC, is a preferred stock deliberately designed to maintain a stable share price around $100 and an annualized dividend of 11.5%, in order to attract conservative institutional funds, which are then used to buy BTC.
Peter Schiff stated that when the market declines and STRC faces pressure to fall below its $100 face value, Strategy's only tool to support the price is to increase the dividend yield, which is why the dividend yield has been pushed up from 9% when it was issued last July to 11.5%. Currently, the total annual dividend payout is approximately $1.5 billion, and this bill will continue to grow with each new round of STRC issuance.
This $1.5 billion figure is precisely Schiff's core concern. He argues that software revenue is negligible, BTC doesn't generate cash flow, and the money to pay dividends can only come from issuing new STRC funds: using new investors' money to pay dividends to old investors—this is the standard characteristic of a Ponzi scheme.
Once its cash reserves run out—currently around $2.25 billion, enough to last 18 months—Saylor will have only two options: either declare a dividend default, which would immediately destroy STRC and trigger a collapse in confidence; or begin liquidating BTC to pay dividends in US dollars, which is exactly what is happening now.
Furthermore, the Financial Times used a more pointed analogy: Jenga. They compared the STRC flywheel to MBS before the 2008 financial crisis: back then, demand for "safe AAA-rated securities" drove up housing prices, and rising housing prices "verified" the safety of these securities until housing prices stopped rising, at which point the entire structure began to fail.
Furthermore, the Financial Times pointed out an easily overlooked legal detail: while STRC is marketed as "over-collateralized by Bitcoin," it is legally an unsecured security with no priority claim against Strategy's BTC. Assuming Strategy does enter liquidation, STRC holders will have to wait in line after the $8.2 billion in convertible bonds and $1.3 billion in STRF preferred stock, and only after all claims against these $9.5 billion have been satisfied will STRC holders be eligible.
Vetle Lunde, head of research at K33, also issued a similar warning: STRC holders face an asymmetric structure where "upside is capped by dividends, but downside risk is real"; if this instrument remains below par for an extended period, it will behave more like credit risk than stable returns.
From this perspective, Saylor's statement about "giving the market a shot in the arm" may actually be the first sign that the Ponzi scheme is about to collapse.
Once the market accepts this development trend, Strategy will lose its flywheel ability to buy BTC through stock issuance and will ultimately be forced into a true cycle of selling coins. Since Strategy holds 4% of the globally circulating BTC, once it transforms from a major buyer to a major seller, the impact on BTC price will be unprecedented in the current market.
It's worth noting that Polymarket data shows the market is currently in a state of indecision. Prior to the Q1 earnings report, Polymarket's bet on Strategy selling any BTC in 2026 was only about 10%. However, after Saylor's comments about selling yesterday, the probability immediately surged to 48%. Meanwhile, Polymarket sets a 42% probability of BTC reaching $100,000 by the end of the year, while the probability of BTC falling back to $55,000 before the end of the year is 55%. The entire market is clearly struggling to find direction between a "strong rebound" and "re-entering deeper waters."
Conclusion
So, if Saylor sells his coins, will the crypto market plummet?
From a purely financial perspective, if Strategy sells only a small amount of BTC, the impact will be minimal. Assuming they sell only BTC equivalent to their dividend obligations annually, approximately $1.5 billion, this amount is relatively small compared to Strategy's past frequent BTC purchases. Therefore, a "small-scale sale" will not have a significant downward impact on the price. Moreover, if the sale is "small and announced in advance," the market will likely be able to absorb it.
But market sentiment is another matter entirely. For the past six years, the crypto market has assumed that Strategy represents the unwavering belief that it will never sell; the BTC it buys is essentially permanently removed from circulation and won't return to the market as selling pressure. This assumption itself is a crucial part of the BTC bull story: "the largest institutional holder guarantees not to sell" is one of the implicit premises of the market's structurally bullish outlook. When this premise disappears, the market must begin to recalculate a variable that has never been quantified before: the fact that "Strategy has become a seller."
Finally, a deeper impact lies in whether it will affect other DATs. Strategy's success has spawned over 100 publicly listed companies replicating its model, but currently, approximately 40% of the market valuation is lower than the actual value of their BTC holdings. If even Strategy starts selling its tokens, there's almost no reason for smaller DATs, whose mNAV has already fallen below 1 and can no longer raise funds through equity, not to follow suit. A chain reaction of selling pressure from a collective deleveraging by DAT companies could truly cause a market downturn.
