By HIBIKI, CryptoCity
Corporate Bitcoin Holders Face Liquidity Crunch, Initiate Significant Sell-Offs
Major cryptocurrency reserve companies and corporate Bitcoin holders have recently demonstrated a clear trend of liquidating their digital assets.
MicroStrategy (MSTR), the world’s largest publicly traded Bitcoin holder, has offloaded 1,690 Bitcoins over two consecutive weeks to repurchase preferred stock. Similarly, Trump Media & Technology Group (TMTG) “cut losses” on 65 Bitcoins in Q2 and is now pivoting towards offering financial data API licensing.
Adding to this trend, Bitcoin reserve company Empery Digital aggressively sold 1,635 Bitcoins within a month to repay debts and fund real estate investments for its transformation into an AI data center.
MicroStrategy Sells Over 6,900 BTC This Year to Bolster STRC and Cash Reserves
MicroStrategy’s latest financial maneuvers include generating $108.6 million last week from the sale of 1,690 Bitcoins, alongside raising an additional $653.1 million through the issuance of 6.59 million common shares.
The proceeds from the Bitcoin sales were entirely allocated to repurchasing STRC preferred stock. Furthermore, $650 million from the common stock offering was channeled into MicroStrategy’s U.S. dollar reserves, boosting its total reserve balance to $4.65 billion.
This marks MicroStrategy’s fourth public disclosure of Bitcoin sales this year, bringing its cumulative disposals to 6,948 BTC. Despite these sales, MicroStrategy maintains a substantial holding of 840,447 Bitcoins, acquired at a total cost of approximately $63.36 billion, averaging $75,385 per Bitcoin. The recent sales, after accounting for transaction fees, were executed at an average price of $64,262 per Bitcoin, indicating a realization of assets below their average acquisition cost.
The company still has $785.2 million remaining in its preferred stock buyback program, with STRC’s stock price currently stabilizing around $95.45.
Trump Media Reports Significant Losses, Sells 65 BTC, Pivots to AI and Data Licensing
Trump Media & Technology Group (TMTG) reported a challenging second quarter, with net losses surging over tenfold to $238 million, primarily due to unrealized losses from declines in Bitcoin and Cronos (CRO). This expanded the loss per share to $0.86.
Regulatory filings reveal that TMTG’s Bitcoin holdings decreased by 65 units during the quarter, settling at 9,477 BTC, with total asset value estimated at approximately $1.2 billion.
Addressing both operational and non-operational losses, interim CEO Kevin McGurn stated during the earnings call that the company has significantly scaled back new ventures such as online gaming and cryptocurrencies. Instead, TMTG will refocus on its core social media platform, Truth Social.
McGurn highlighted a new strategic emphasis on the “Truth API” data licensing service. This service offers high-frequency trading firms early access to public post data, with 10 clients already signed on, projected to generate an additional $7 million to $12 million in annual revenue. Furthermore, the planned merger with nuclear fusion company TAE remains on track.
- Related Report: Trump Media Scraps $6.4 Billion CRO Treasury Plan, Ends Crypto.com Partnership in Market Shock
Empery Digital Liquidates 1,635 Bitcoins to Fund AI Transformation and Debt Repayment
Bitcoin reserve company Empery Digital’s latest quarterly report reveals that it intensively sold 1,635 Bitcoins between July and early August, generating $102.2 million. Following these sales and accounting for pledged assets, its unrestricted Bitcoin holdings have sharply decreased to just 325 BTC.
The proceeds from Empery’s Bitcoin sales were primarily used to repay repurchase agreement (repo) financing and secured debts. This strategic move reduced its pledged Bitcoin holdings from 1,539 to 954 BTC, temporarily alleviating the pressure from a 143% mandatory liquidation threshold stipulated in its loan agreements.
Despite these efforts, Empery continues to face working capital shortfalls and the significant financial demands of its strategic pivot. The company has already invested $2.9 million in its real estate joint venture, EMHU, with an additional $62.1 million funding obligation anticipated upon the completion of a data center real estate acquisition.
Coupled with a prior $20 million investment in Cardinal Data Power (CDP), Empery is aggressively pursuing a transformation into an AI data center provider. Management has indicated that future cash flow needs may be met through operational revenues, derivative products, or further Bitcoin sales.
- Related Report: Ditching the “HODL” Strategy for AI: Empery Digital Sells Half Its Bitcoin, Cashes Out $87 Million
The Shifting Tides: Bitcoin Treasury Strategy Under Pressure
This series of corporate Bitcoin sell-offs signals that the so-called “Bitcoin treasury” strategy is undergoing a severe liquidity stress test. When high financing costs, looming debt liquidation thresholds, and operational losses converge, corporations’ past commitments to “holding firm” ultimately yield to the undeniable realities of cash flow management.
(The above content is an excerpt and reproduction authorized by our partner CryptoCity. Original link)
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