Disclosure: One of the authors of this story owns shares in Strategy (MSTR).

Strategy (MSTR), the largest publicly traded holder of bitcoin BTC$72,675.37, sold some of its holdings for the first time in four years to fund dividend payments on STRC, its perpetual preferred stock, known as Stretch.

The company sold 32 bitcoin between May 26 and May 31 at an average of $77,135, totaling $2.5 million, disclosed in an 8-K filing on Monday. Strategy remains the largest holder of bitcoin, with more than 843,700 BTC on its balance sheet at month-end, purchased at an average cost of $75,699. That means the sale accounted for just 0.0038% of the company’s holdings.

While the news is making a splash across the crypto community, the market has been anticipating a potential sale since Strategy’s Executive Chairman, Michael Saylor, first alluded to one during the company’s first-quarter earnings call this year.

During the call, he said, “We will probably sell some bitcoin to pay a dividend just to inoculate the market and send the message that we did it.” The mention of the sale was a surprise at the time, as previously Saylor had numerous time pubicly advocated for buying and holding bitcoin forever.

Following his remark during the conference call, Saylor dived depper into several potential sources of capital to meet Strategy’s dividend obligations and support the balance sheet in an interview with CoinDesk. Selling bitcoin was one of the options mentioned. He emphasized that management evaluates these decisions through the lens of bitcoin per share, prioritizing actions that are accretive to shareholders.

Strategy shares slid about 6%, following the news on Monday and were recently trading around $150.

Bitcoin, the largest cryptocurrency, dropped below $71,500 on Monday following the sale announcement and Iran’s decision to halt talks with the U.S. in protest over Israel’s incursions into Lebanon. More than $90 million in BTC-tracked futures positions were liquidated shortly after.

First sale in 4 years

Monday’s sale is Saylor’s first standalone divestment disclosed to date.

However, in December 2022, Strategy also sold 704 bitcoin and bought 2,395 BTC, resulting in a net increase and making the sale primarily a “tax-loss harvesting” exercise. Essentially, at the time, the strategy was to sell assets at a loss to offset capital gains on profitable ones.

The latest transaction stands out because it appears to be the first net bitcoin reduction recorded in a standalone 8-K filing. and likely not a tax-loss harvesting move. It is also the first time Strategy has publicly disclosed a bitcoin sale on its website.

In addition, for the week, Strategy raised $128.3 million through its at-the-market (ATM) common stock program and allocated a small portion of the proceeds to increase its U.S. dollar cash reserve from $871 million to $900 million. It recently spent $1.5 billion to repurchase its 2029 convertible notes.

Read more: Strategy holds STRC dividend at 11.5% for fourth straight month

UPDATE (June 1, 13:41 UTC): Adds previous sale starting in fifth paragraph.

UPDATE (June 1, 14:04 UTC): Rewrites first two paragraphs, adds third on sale being flagged in advance, share price reaction.

UPDATE (June 1, 16:06 UTC): Adds more context of the sale and previous comments by Saylor.

UPDATE (June 1, 16:11 UTC): Changes lead image.