Grayscale's Zach Pandl advises Strategy to sell $3B in Bitcoin to cover cash obligations

The company that bet its entire identity on never selling Bitcoin might need to sell a lot of Bitcoin.

Zach Pandl, Head of Research at Grayscale, has recommended that Strategy, the company formerly known as MicroStrategy, should offload at least $3B worth of Bitcoin to meet its cash obligations over the next two years. The suggestion excludes one convertible note, meaning the actual financial burden could be even steeper.

The math behind the recommendation

Pandl’s case is rooted in straightforward arithmetic. Strategy’s capital structure, particularly its preferred stock STRC, has created a dividend burden that the company cannot easily ignore. STRC has recently hit new lows, suggesting investors are already pricing in trouble.

According to Pandl, raising the STRC dividend by just 50 basis points would pile roughly $100M in additional obligations onto the company over two years.