Michael Saylor’s Strategy may sell Bitcoin to pay off debt

Michael Saylor’s software company, Strategy, which is heavily invested in Bitcoin, may soon have to sell some of its Bitcoin holdings to meet financial obligations.

In an Apr. 7 regulatory filing, the company disclosed that if it fails to secure timely financing, either through equity or debt, it may be forced to sell Bitcoin (BTC) to meet its financial obligations. Bitcoin’s price has a huge impact on the company’s capacity to settle its debts since the majority of Strategy’s assets are in Bitcoin.

For Q1 2025, Strategy expects to report an unrealized loss of nearly $6 billion, despite a $1.69 billion tax benefit. The company has around $8 billion in debt and faces a huge financial pressure with $35 million in annual interest payments and $150 million in yearly dividends. Its software business has not been generating enough revenue to support these obligations.

According to Saylor’s Mar. 31 post on X, the company holds 528,185 BTC purchased at an average price of $67,458 per coin, acquired for more than $35 billion. If Strategy is unable to secure additional funding, it could result in selling at prices lower than its initial investment. 

While this situation raises concerns, Wu Blockchain pointed out that similar warnings have appeared in past filings, meaning it’s not entirely unusual. 

To address its liquidity crisis, on Mar. 10, Strategy announced its plan to raise $2.1 billion through the sale of perpetual preferred stock. The funds from this offering will be used to support corporate operations in addition to buying more Bitcoin.

The preferred stock, which offers an 8% dividend, will help Strategy raise capital without relying on traditional debt structures. However, the company’s future still heavily depends on how well Bitcoin performs, even if it can secure this new investment. 

Bitcoin is trading at roughly $76,000 at press time, down 10% over the past week. Despite the bearish outlook brought about by Trump’s tariffs, some analysts remain optimistic about Bitcoin’s near-term future. BitMEX co-founder Arthur Hayes stated in an Apr. 8 interview with Unfolded that Bitcoin might hit $110,000 or higher in the coming months. 

According to Hayes, central banks everywhere will soon need to lower interest rates, which could lead to an increase in global liquidity. This infusion of liquidity would help Bitcoin as a deflationary asset, raising its price.