Strategy Aims to Fund Dividends with $1.25B Bitcoin Sales While Growing Treasury

Michael Saylor, executive chairman of Strategy, has unveiled a plan to fund dividends through Bitcoin sales while simultaneously growing the company's treasury. According to Saylor, issuing variable-rate perpetual preferred stock, known as STRC, can sustainably cover dividend payments and allow Strategy to purchase more Bitcoin than it sells.

The math behind this model relies on a 2.3% annual appreciation of Bitcoin for it to keep running. In late May, Strategy divested 32 BTC to fund STRC distributions, but the company has authorized up to $1.25 billion in Bitcoin sales through its newly established Digital Credit Capital Framework.

The STRC preferred stock is designed to appeal to institutional investors in the Middle East, packaging Bitcoin exposure as a credit product that makes it palatable to investors who might otherwise avoid direct cryptocurrency holdings.