Strategy Buying And Selling Bitcoin Is Actually A Good Thing, Here’s Why

• Michael Saylor confirmed that Strategy will sell some of its Bitcoin supply to sustain operations and fund further BTC purchases.

Strategy (formerly MicroStrategy) Executive Chair Michael Saylor is now telling people that their business is considering selling Bitcoin (BTC). His statement runs counter to his “never selling” narrative since the company began accumulating the asset in August 2020. Meanwhile, it coincides with CEO Phong Le’s earlier hints.

Strategy Finally Selling Bitcoin Soon

Strategy has been notably holding onto its Bitcoin haul for barely 6 years. Along the way, Saylor has reiterated in interviews that they’re not selling and has remained firm on his BTC maxi play. Records also show that the company has not sold any of its holdings.

However, cracks in Strategy’s Bitcoin maxi stance have begun to appear lately. Le admitted that selling BTC was never out of their consideration if it’s necessary to meet their financial obligations to investors. It’s worth noting, though, that he framed it as a move of last resort, as they still have cash reserves for backup in cases of market headwinds.

Recently, Saylor has flipped the script, confirming they will have to sell Bitcoin. He acknowledged that many people believe the decision will negatively impact Strategy or the broader Bitcoin market.

However, the exec explained that if they buy BTC with credit at a low price, it only makes sense to sell some of it when the price appreciates. The capital gains will enable the business to cover its dividend payments and sustain its model as a net BTC buyer.

Why It’s a Good Pivot for Both Strategy and BTC

Market sentiment will likely have a knee-jerk reaction with Strategy suddenly selling Bitcoin. There’s potential selling pressure in such a scenario in the short run. On the other hand, it’s actually beneficial for both the company and the premier crypto asset in the long run.

In addition to Saylor pointing out the necessity of the move to drive liquidity and sustainability for Strategy, simply hoarding a massive Bitcoin supply is never a good indicator of a healthy ecosystem. Echoing BitMEX Co-Founder Arthur Hayes’ concerns about BlackRock taking control of a massive chunk of the asset, such a decision could ultimately destroy Bitcoin.

Bitcoin needs to maintain cash flow to continuously generate transaction fees, which are vital for incentivizing miners securing its network. Very low transaction volumes will deprive BTC of its key lifeline, potentially leading miners to shut down their rigs or move to other, more rewarding projects.

Moreover, from an economic standpoint, a healthy economy and price appreciation can only happen if there are active buyers and sellers. That will not occur if only a few hoard the supply of a commodity, and will instead result in a liquidity trap.

Furthermore, one of the most persistent criticisms of Strategy’s indefinite “HODL” or “buy-and-hold” model is that it centralizes control over more than 4% of BTC’s circulating supply. It inadvertently makes the entity a single point of failure for market sentiment. If it somehow decides to dump all its Bitcoin holdings in one go, or if all of it gets compromised in some way, it could trigger a black swan event that the asset will never recover from.

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