Strategy's 7-Week Bitcoin Pause: Inside the $4.65B Reserve, the STRC Buyback, and the Plan to Resume Buying

Strategy (NASDAQ: MSTR), the Michael Saylor-chaired firm formerly known as MicroStrategy, has now gone seven weeks without buying Bitcoin. Its last disclosed purchase was 520 BTC on June 22, 2026. In the weeks since, the company has done the opposite of accumulate: an August 10 Form 8-K filed with the U.S. Securities and Exchange Commission shows Strategy sold 1,690 BTC between August 3 and August 9 for $108.6 million net, at an average price of $64,262 per coin, well below its $75,385 average acquisition cost. Holdings now stand at 840,447 BTC, bought for roughly $63.36 billion including fees.

The proceeds did not buy more Bitcoin, every dollar went toward repurchasing 1,152,020 shares of STRC, Strategy's Variable Rate Series A Perpetual Stretch Preferred Stock, at roughly $94.27 against a $100 par value. Separately, Strategy sold 6,585,682 MSTR shares for $653.1 million, directing $650 million of that into its USD Reserve, which the filing puts at $4.65 billion as of August 9. CEO Phong Le has since described that cushion as covering about 2.7 years of preferred dividends and debt interest. Le says the pause is temporary and not a call on price. He said Strategy will get back to buying more Bitcoin over the course of the year. Two days later, Saylor published a public Bitcoin Credit model, opening the company's collateral math to outside scrutiny for the first time.

This article covers why Strategy paused, the arithmetic behind selling Bitcoin below cost to retire preferred stock at a discount, what the $4.65 billion reserve actually protects, and what the new credit dashboard reveals about where the real pressure sits.

 

 

Strategy has not bought Bitcoin since June 22, 2026, a seven-week gap that remains open as of publication rather than one that has concluded. During that window it sold roughly 6,948 BTC under a Digital Credit Capital Framework adopted on June 29, most recently 1,690 BTC at an implied loss of about $11,123 per coin, using the proceeds to buy back STRC preferred stock below par. Equity sales, not Bitcoin sales, did the heavy lifting on the cash buffer: $650 million of a $653.1 million MSTR raise went into a USD Reserve that reached $4.65 billion in the August 10 filing, extending dividend-and-interest coverage by 143 days to 2.7 years. Saylor's newly public Bitcoin Credit model, launched August 12, applies a 10% BTC annualized return reference case across $21.95 billion of debt and preferred stock, and shows the exposure concentrated in the preferred stack rather than the convertible notes.

The pause is measured from Strategy's last disclosed purchase, 520 BTC acquired at an average of $67,068 in the week ending June 21 and reported on June 22. That transaction brought holdings to 847,363 BTC. No purchase has been reported since, and weekly 8-K filings during the gap have disclosed sales instead, on June 30, July 6, August 3 and August 10.

Strategy's first Bitcoin sale of 2026 came in late May and was tiny, 32 BTC worth around $77,000. The behaviour became systematic only after June 29, when the board formally adopted what the company calls the Digital Credit Capital Framework. Since that date Strategy has sold approximately 6,948 BTC. Across the full year, Le puts the ratio at roughly 175,000 BTC bought against about 7,000 sold, a purchase pace some twenty-five times the sale pace, and holdings up about 25% year over year.

It established a board-approved USD Reserve Policy restricting the reserve to preferred dividends and debt interest only, with a floor of twelve months of expected obligations. It authorized a $1 billion repurchase program for digital credit securities and a $1 billion program for common stock. It also created a BTC Monetization Program permitting Bitcoin sales to fund the reserve, dividends, interest and buybacks, initially capped at $1.25 billion and later expanded toward $5 billion.

 

The August 3–9 sale drew the sharpest criticism because Strategy realised dollars at $64,262 against coins carried at an average of $75,385. That is an implied shortfall of $11,123 per coin, roughly 15%, or about $18.8 million across 1,690 BTC. That figure is derived from the portfolio-wide average cost disclosed in the 8-K, not from a realized loss Strategy itself published for those specific coins. The company's actual accounting treatment depends on which tax lots were disposed.

Set against what the proceeds bought, the trade reads differently. The $108.6 million retired 1,152,020 STRC shares at approximately $94.27, a discount of about 5.7% to the $100 par value. STRC's dividend rate was set at 12.00% per annum for semi-monthly periods beginning on or after August 16, 2026. Retiring a 12% perpetual obligation below par removes a permanent cash drain from the capital structure, and it does so at a moment when the security trades at a discount precisely because the market doubts the issuer.

That is the trade in plain terms: accept a one-time economic loss on an appreciating-but-currently-depressed asset in order to permanently extinguish a high-coupon liability at a discount, while supporting the price of the instrument the company still needs to issue into. Whether it is a good trade depends entirely on Bitcoin's forward return, which is the same bet the entire structure rests on.

Of the $653.1 million raised from 6,585,682 MSTR shares during the week, $650 million went into the reserve and $3.1 million to general cash. The $108.6 million of Bitcoin proceeds went entirely to STRC buybacks. The reserve stood at $871 million in late May and roughly $2.55 billion on June 28, representing about 17.4 months of coverage against approximately $1.76 billion in annual preferred dividends and interest expense. It reached $3.75 billion by July 27 at about 2.1 years of coverage, around $4.0 billion in early August, and $4.65 billion as of August 9, with Saylor noting the move extended duration by 143 days to 2.7 years. The 2.7 years covers preferred dividends and interest on outstanding debt, not dividends alone. The company's stated intention is to hold two to three years of coverage, so the current position sits inside its own target band rather than above it.

 

Saylor launched a public Bitcoin Credit dashboard, extending disclosure work the company began with a BTC Hurdle ARR of 10.8% in its second-quarter report. The model publishes credit spreads, Bitcoin coverage ratios, tier ratings and, most usefully, the Bitcoin floor price below which each instrument becomes undercollateralized. It runs a 10% Bitcoin annualized rate of return as its reference case and colour-codes output as Investment Grade, High Yield or Distressed. The headline numbers cover roughly $53.5 billion in Bitcoin reserves against $21.95 billion in debt and preferred stock. At a Bitcoin price near $64,000 the model values the reserve at about $53.85 billion, and calculates that only a 3.22% annualized return would be required to meet obligations, against the 10% assumed.

Strategy's approximately $6.71 billion of convertible debt across six tranches maturing 2028 to 2032 is covered enormously: the 2028 convertible shows 173.5x Bitcoin coverage, and even the weakest, the 2032, sits at 26.1x with a floor of $2,456, some 96% below spot. The preferred stack is where risk actually lives. STRF is strongest at 16.1x coverage with a $3,983 floor and a 9-basis-point spread, comfortably investment grade. STRD sits at just 3.1x coverage with a floor of $20,587, roughly 9.5% to 10% below the prevailing price, and a 173-basis-point spread placing it in high yield.

That is a genuinely useful admission; It tells credit investors that the convertible notes are effectively risk-remote and that the marginal solvency question attaches to the junior preferred series, which is exactly where Strategy has been deploying buybacks and dividend increases.

Three variables determine whether this holds, The first is Bitcoin's price. Holdings of 840,447 BTC carried at $63.36 billion sit at an unrealized loss of roughly $10 billion with Bitcoin near $63,350, against about $8.7 billion when the price was near $65,000 on August 10. Bitcoin is down roughly 27% year to date and close to 50% below its October 2025 record above $126,000. Every leg lower widens the gap between spot and the published floors, and the floors are now public, which cuts both ways: transparency reassures in calm markets and accelerates repricing in stressed ones.

The second is the equity channel. The reserve was funded overwhelmingly by issuing MSTR stock. That works while the shares trade at or above the net asset value of the Bitcoin holdings and becomes dilutive and self-defeating below it, which is the structural criticism levelled at every Bitcoin treasury company in this cycle. As of August 9, roughly $17.51 billion of Class A common stock and $2.1 billion of STRK capacity remained available, so the capacity exists; the question is the price at which using it makes sense.

The third is whether sales stay discretionary. Everything Strategy has sold so far has been sold from a position of adequate coverage, to buy back discounted paper or extend duration. The distinction between selling because it is accretive and selling because obligations demand it is the entire credit story, and it is not visible in any single filing. It becomes visible only in the trend of the reserve and the coverage ratio over successive quarters.

Since Strategy files weekly, the first 8-K to disclose a purchase rather than a sale will confirm Le's guidance and end the pause formally, and until one appears, the accumulation gap is open regardless of stated intent. Watch STRC's move toward par, which stood near $95 to $95.55 in the days after the sale, recovered more than 30% from a late-June low around $71.25, and remains the clearest market read on whether the repurchase strategy is working. Watch the remaining buyback capacity: the 8-K showed $893.8 million available under the $1 billion digital credit program as of August 2, before the $108.6 million deployed the following week. And watch the reserve duration, because a reserve that keeps lengthening indicates capital management from strength, while one that plateaus or shortens while sales continue indicates something else. For traders, the practical read is that MSTR has become a leveraged Bitcoin position wrapped in a credit structure with its own dynamics. The equity no longer tracks Bitcoin cleanly, because share count, reserve balance and preferred obligations all now move the outcome independently.

 

 Not as of publication; The last disclosed purchase was 520 BTC reported on June 22, 2026. CEO Phong Le told Fox Business on August 10 that the company will get back to buying more Bitcoin over the course of the year, and separately indicated purchases would resume before year-end, but no purchase has appeared in a filing yet.

 

Why did Strategy sell Bitcoin at a loss? 

It sold 1,690 BTC at $64,262 against a $75,385 average cost, an implied shortfall of about $11,123 per coin, and used all $108.6 million to repurchase 1,152,020 STRC preferred shares at roughly $94.27 versus a $100 par value.

 

 The August 10 Form 8-K states a USD Reserve of $4.65 billion as of August 9, 2026. Le cited $4.75 billion in an interview published the same day. The filing figure is the auditable one.

 

 It is the period the USD Reserve could fund preferred stock dividends and interest on outstanding debt, against roughly $1.76 billion in combined annual obligations.

 

What is STRC? 

STRC is Strategy's Variable Rate Series A Perpetual Stretch Preferred Stock, designed to give traditional investors Bitcoin-linked exposure with a structured dividend and lower volatility than direct crypto. Its rate was set at 12.00% per annum for semi-monthly periods beginning on or after August 16, 2026. It trades against a $100 par value and fell as low as roughly $71.25 in late June before recovering above $95.

 

What is Strategy's Bitcoin Credit model? 

A public dashboard launched August 12, 2026, showing credit spreads, Bitcoin coverage ratios, tier ratings and the Bitcoin floor price below which each instrument becomes undercollateralized. It uses a 10% Bitcoin annualized return reference case across about $53.5 billion in reserves and $21.95 billion in debt and preferred stock, and calculates a 3.22% breakeven return.

 

 840,447 BTC as of August 9, 2026, acquired for approximately $63.36 billion including fees and expenses, at an average of $75,385 per coin. That position carries an unrealized loss of roughly $10 billion at prices near $63,350.

 

 Yes. Despite recent sales it remains the largest publicly disclosed corporate holder, controlling more than 4% of Bitcoin's 21 million supply, with holdings up nearly twelvefold from 70,470 BTC in 2020.