Strategy with 12 Trillion Debt... Finally Considering Selling Bitcoin?

Submitted '8-K' Report to the US SEC

Mentioned Possibility of Selling Bitcoin

Threat to Average Price if Below $70,000

Analysis: Not an Active Selling Intention

Cover of the '8-K' report submitted by Strategy to the US Securities and Exchange Commission (SEC) on the 7th (local time). Photo provided by the US Securities and Exchange Commission (SEC)

Strategy, known as the listed company with the most Bitcoin (BTC) holdings globally, has reported to US authorities that it "may sell Bitcoin," drawing attention to the actual possibility of a sale. As the decline in Bitcoin prices has accelerated recently, there is analysis that Michael Saylor, chairman of Strategy, is also feeling the pressure.

According to the industry on the 9th, Strategy reported the possibility of selling Bitcoin through an '8-K report' to the US Securities and Exchange Commission (SEC) on the 7th (local time). An 8-K is a report submitted to the SEC within four business days of the occurrence of significant changes that may affect investment, such as management or financial conditions, by a US-listed company.

What the market focused on was the 'financial risk' item mentioned in the 8-K report by Strategy. This is because Strategy left open the possibility of selling Bitcoin in this item. Strategy stated, "Our Bitcoin strategy is exposed to various risks related to Bitcoin," and "To generate cash, we may need to sell Bitcoin or establish a separate strategy. (However) even if we pursue such a strategy, we may fail to generate cash flow."

Status of Strategy's Bitcoin (BTC) purchases. Photo provided by the US Securities and Exchange Commission (SEC)

Threat to Average Price if Below $70,000

Strategy emphasized 'financial obligations' several times in the report. It explained that if Bitcoin prices plummet, the ability to fulfill financial obligations such as debt repayment and dividend payments would inevitably be impacted.

According to this 8-K report, Strategy's debt totals $8.22 billion (about 12.2 trillion won), with annual interest expenses alone amounting to $35.1 million (52 billion won). The dividends Strategy must pay annually also amount to $146.2 million (about 220 billion won).

Strategy emphasized, "Since most assets are concentrated in Bitcoin, if we cannot raise funds under favorable conditions in a timely manner, we may have to sell Bitcoin," and "In this case, there is also the possibility of selling below cost or under unfavorable conditions."

The problem is that Bitcoin prices are on a downward trend due to the impact of US tariffs. According to the cryptocurrency market tracking site CoinMarketCap, Bitcoin was trading at around $77,000 on the 9th, down about 2.4% from the previous day. Compared to a week ago when US President Donald Trump announced a large-scale reciprocal tariff policy, it has fallen by nearly 9%.

The key is when Bitcoin prices fall below $70,000. In this case, Strategy enters a full-fledged principal loss zone. According to the report, Strategy's average purchase price of Bitcoin is $67,458. Strategy has already suffered a loss of $5.91 billion (about 8.7 trillion won) from Bitcoin investments in the first quarter alone. Strategy predicted, "It may be difficult to turn a profit in the future."

The market sees that the impact of US reciprocal tariffs is accumulating in the asset market, and Bitcoin prices may be threatened at the $70,000 level within the next 1-2 weeks. Sean McNulty, head of derivatives for Asia-Pacific (APAC) at cryptocurrency brokerage FalconX, told Bloomberg, "If the decline in cryptocurrencies deepens, Bitcoin prices could fall to the $65,000 range."

Bitcoin (BTC) price trend over the past week. Photo: CoinMarketCap capture

Also Stopped Additional Bitcoin Purchases

The sluggish performance of the core software (SW) business is also a factor that increases Strategy's concerns. Due to the impact of business sluggishness, Strategy suffered a net loss of $1.167 billion (about 1.7 trillion won) last year alone. Strategy stated, "The SW business may not generate enough cash flow to fulfill financial obligations in the future."

Given the situation, there is also a view that Strategy is considering the actual possibility of selling Bitcoin. The fact that Strategy has stopped additional Bitcoin purchases this month also supports this opinion.

Yoon-Young Choi, head of research at Korbit, said, "It seems that Strategy is clearly recognizing the possibility of market adjustment (in the cryptocurrency market)," and "Internally, they are considering the possibility of Bitcoin prices falling to the average price of $67,000."

Choi added, "(This 8-K report) is interpreted as Strategy maintaining the basic strategy of 'long-term holding of Bitcoin,' but if liquidity risks expand, they may respond strategically flexibly."

However, there is also analysis that it is difficult to interpret this 8-K report as an active intention to sell Bitcoin. Strategy also stated in the report, "As part of the Bitcoin (financial) strategy, we plan to continue increasing debt and issuing preferred stock." Additionally, previous reports also included the possibility of selling Bitcoin, so this is interpreted as merely a general disclosure practice.

Seok-Moon Jeong, head of Presto Research, said, "Most US-listed companies have submitted 8-K reports to the SEC due to the recent decline in the asset market," and "(The mention of Bitcoin sales) should be viewed from the perspective of listing all possibilities to avoid future legal issues."

Choi said, "The $67,000 range may be a level similar to the Bitcoin purchase price of other institutional investors as well as Strategy," and "Since it is a section where a technical rebound can occur, it is necessary to watch the price trend a little more closely."