Is Michael Saylor Really Exiting Bitcoin?

Michael Saylor once urged Bitcoin believers to hold at all costs, even jokingly suggesting selling a kidney rather than their Bitcoin. Now, his company is quietly offloading thousands of bitcoins. So, is Saylor really stepping away or is something bigger at play in the crypto treasury scene?

Why Is Michael Saylor’s Company Selling Bitcoin?

Back in February, when Bitcoin dipped below $85,000, Michael Saylor famously declared on social media that holders should “sell a kidney if you must” but never part with their Bitcoin. Fast forward several months, and his company, MicroStrategy, has sold thousands of bitcoins. This isn’t some sudden change of heart—it’s the result of an intricate financial structure and obligations that demand cold, hard cash every month, regardless of Bitcoin’s price.

At the heart of this is MicroStrategy’s sizable Bitcoin holdings—over 842,000 coins—but also a mounting cash payout challenge. The company issues preferred securities that come with hefty, fixed dividend payments. These obligations exist independent of Bitcoin’s volatile price swings. Whether Bitcoin climbs to $126,000 or plunges to $63,000, these dividend payments must be met on schedule.

How Does MicroStrategy Fund These Obligations?

MicroStrategy’s strategy to fund these massive dividend payments has relied on issuing new shares at a premium market price to Bitcoin’s value on their balance sheet. At Bitcoin’s peaks, this worked well. The company issued stock at higher prices, raised billions, bought more Bitcoin, and all shareholders effectively owned more coins without dipping into the treasury.

But the system hinges entirely on the market believing in the company’s premium valuation. That premium has evaporated. Recently, MicroStrategy’s market-to-asset-value ratio (MNAV) has slipped below 1.22, a critical threshold where selling new shares stops being beneficial—it becomes destructive to shareholder value. Without that premium, the company’s “infinite money glitch” closes, leaving it no choice but to sell Bitcoin to pay both dividends and to buy back preferred shares to stabilize their securities’ prices.

What Is ‘Stretch’ and Why Is It Headlining the Sell-Off?

One preferred security called “Stretch” (STRC) launched in mid-2025 at a 9% dividend. It comes with a ‘ratchet’ mechanism: when its market price falls below a $95 threshold, the dividend rate edges upwards in half-percentage increments, hiking the payout burden. By July, this stretched to 12%, with dividends paid semi-monthly instead of monthly, dramatically increasing cash outflows.

Stretch’s price hovered at $89 by the end of July, 11% below its par value, triggering further strain on cash flow. In the last quarter, MicroStrategy shelled out $400 million in preferred dividends, while its software business generated only $122 million in revenue—less than a third of the payout. This ballooning gap is unsustainable, forcing more Bitcoin sales to keep the structure afloat.

Why Is This More Than Just MicroStrategy’s Problem?

MicroStrategy’s situation underscores a wider systemic issue plaguing roughly 200 public companies holding over 1.2 million Bitcoin collectively. Many have copied MicroStrategy’s playbook—issuing perpetual preferred stock to buy coins, all while signing up to fixed dollar payments. The clash between Bitcoin’s unpredictable price swings and scheduled cash obligations forces these firms to offload Bitcoin in down markets, locking in losses.

Some companies have already faced steep consequences. For instance, Metaplanet in Tokyo saw its market-to-asset ratio slide to 0.72, and Satsuma in London opted to liquidate its entire Bitcoin stash later this year. The model that promised an easier, corporate way to own Bitcoin now looks fragile, with many players unwinding their positions as reality bites.

Is MicroStrategy Heading Toward Bankruptcy?

Despite enormous paper losses—an $8.2 billion quarterly mark-to-market hit largely unrealised—MicroStrategy isn’t on the brink of collapse. It has a cash reserve of $4 billion, enough to cover two years of dividend payments. The market is pricing in some risk—analysts have slashed price targets, but none foresee bankruptcy.

Importantly, owning MicroStrategy stock means owning a capital allocator focused on Bitcoin, not the coins directly. This distinction came into sharper focus with discussions of potentially removing companies heavily invested in crypto from major indexes, which could spur forced selling unrelated to company fundamentals.

What Does Michael Saylor’s Position Mean?

Saylor has defended himself, saying his personal stance on Bitcoin hasn’t changed and he personally hasn’t sold any Bitcoin. But he acknowledges the company is a separate entity and must meet its obligations. The bigger picture is not about him but the fact that Bitcoin as an asset remains unaffected by these corporate cash crunches. Bitcoin doesn’t pay dividends, has no coupon, and owes nothing month to month.

The corporate Bitcoin treasury story was always an experiment—to see if companies could outperform owning Bitcoin outright. Right now, that experiment is unraveling. But it’s telling us less about Bitcoin’s fundamentals and more about the risks of leveraging volatile assets with fixed-dollar liabilities.

The big question remains: Is this merely a temporary squeeze that will ease as Bitcoin recovers, or is it a warning sign of deeper challenges for crypto treasuries? Either way, the narrative around Michael Saylor and MicroStrategy’s Bitcoin holdings is far more nuanced than the headline sales suggest.

If you want to dive deeper into how these treasury companies operated and what drove their initial premiums, several detailed breakdowns offer valuable insight into this winding story.