Galaxy Research: Strategy must find ways to monetize its Bitcoin after digital credit framework stopgap
- Galaxy Research’s Alex Thorn flagged Strategy’s new Digital Credit Capital Framework as the defining debate in Bitcoin this week.
- The company is now authorized to sell up to $1.25 billion in BTC and buy back $2 billion of its own stock while sitting on a $14 billion unrealized loss.Â
- The framework gives Strategy tools to manage its capital structure, but whether it actually sells any Bitcoin is a decision that has not yet been made.
Alex Thorn, the head of firmwide research at Galaxy Research, shared Galaxy’s analysis on X, adding his voice to the debate regarding Strategy’s newly announced Digital Credit Capital Framework.
The new rules have sparked a debate about whether or not they will solve the company’s capital-structure problems or simply delay them.Â
How does Strategy’s new capital framework operate?Â
Strategy (Nasdaq: MSTR) recently disclosed a new “Digital Credit Capital Framework” in a 8-K regulatory filing.Â
Cryptopolitan reported that the framework grants the company formal permission to sell up to $1.25 billion worth of Bitcoin. Notably, the firm is facing a massive unrealized loss of roughly $14 billion on its holdings of 847,363 BTC.Â
The framework creates a formal USD reserve policy that introduces revised dividend terms for its STRC preferred shares, and authorizes separate repurchase programs for both preferred stock and MSTR common shares at $1 billion each.Â
The board has kept aside the company’s $2.55 billion cash reserve, restricting its use to preferred dividends and debt interest.Â
If the current spending rates of roughly $1.76 billion annually are retained, this reserve is expected to last for about 17 months. If the full authorized sale of Bitcoin were to be executed, total liquidity would stretch to approximately $3.8 billion, an amount that would cover about 26 months of obligations.
Alex Thorn of Galaxy Research pointed out that the core of the debate is whether these new rules actually solve Strategy’s capital-structure issues or simply delay them.Â
The company sold 32 BTC for about $2.5 million in its first-ever Bitcoin sale in late May to cover a dividend payment. JPMorgan recommends that Strategy sell its shares to raise money rather than sell Bitcoin.
Are investors buying MSTR shares?
MSTR shares climbed 12.6% to $92.68 on the Monday after the filing was disclosed, and then by Wednesday, the value had soared past $100. This figure represents a 27% increase from the prior Friday’s close. The STRC preferred shares also increased, closing at $87.87 on July 3.
Benchmark Equity Research sees the framework as a good thing. The firm kept its Buy rating on MSTR and set a price target of $570.Â
Strategy’s leaders, including Chairman Michael Saylor, say the overhaul is needed to strengthen the company’s credit. Saylor said that “digital credit requires liquidity, discipline, and active capital management.”
Strive, another firm pursuing a Bitcoin-backed capital structure, told investors on July 2 that they should not assume the company will automatically issue new shares of its SATA preferred stock at $100 par value, citing abnormal market conditions.Â
Strive’s chief risk officer Jeff Walton shared figures showing that short interest in SATA rose by about 1 million shares over the 30 days to June 30, with borrow costs spiking from 6.1% to 68.6% APR over the same period.
Don’t just read crypto news. Understand it. Subscribe to our newsletter. It's free.
FAQs
How much Bitcoin does Strategy hold and what is its unrealized loss?
Strategy holds 847,363 BTC purchased at an average cost of roughly $75,646 per coin, with Bitcoin trading near $62,000 as of early July 2026, leaving the position carrying more than $14 billion in unrealized losses according to the company's SEC filing.
What does Strategy's BTC monetization program allow the company to do?
The program gives management discretion to sell Bitcoin when it determines conditions are favorable, with proceeds directed toward rebuilding cash reserves, paying preferred dividends, or funding share repurchases, with $1.25 billion in initial capacity authorized by the board.
How did MSTR stock react to the Digital Credit Capital Framework announcement?
MSTR rose 12.6% on the Monday following the June 29 disclosure and continued climbing past $100 by Wednesday, gaining 27% from the prior Friday's low, while STRC preferred stock rallied roughly 10% from around $74.57 to close at $87.87 on July 3.
Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.
Hannah Collymore
Hannah is a writer and editor with nearly a decade of blog writing and event reporting experience in the crypto space. At Cryptopolitan, Hannah contributes to the news page, reporting and analyzing the latest developments in DeFi, RWA, crypto regulation, AI and frontier tech industries. She graduated from Arcadia university with a degree in Business Administration.
