Grayscale Says Strategy’s Leveraged Bitcoin Model Faces First Real Stress Test

Grayscale has warned that Strategy’s leveraged Bitcoin accumulation model is facing its first major stress test, raising concerns about reduced buying capacity and possible future sales if financial pressures intensify.

According to Grayscale research head Zach Pandl, recent shifts in Strategy’s balance sheet strategy have weighed on market sentiment. The firm recently sold 32 BTC and also offloaded $128 million in shares, a move that coincided with a broader decline in Bitcoin prices and a 12.8% drop in Strategy’s stock to a two-month low.

STRC Structure Adds Pressure on Cash Flow

A key concern centers on Strategy’s “Stretch” preferred equity instrument (STRC), which is designed to trade near $100 and pay an 11.5% dividend. However, STRC has recently traded below that level, meaning investors may demand higher returns.

If Strategy raises dividends to support the STRC price, it could increase cash obligations and potentially force additional Bitcoin sales.

Analysts Split on Long-Term Impact

Grayscale’s Pandl said Strategy’s ability to continue accumulating Bitcoin at current share prices appears limited under current conditions. He added that reducing reliance on leveraged Bitcoin treasury models could ultimately strengthen the broader ecosystem.

Other analysts noted that Strategy’s recent Bitcoin sale acted as a psychological trigger for market weakness, even though it represented only a small portion of its total holdings of more than 843,000 BTC.

Goldbug Peter Schiff said  on X on Thursday;

Some experts argue the sale gives Strategy more flexibility in managing liquidity and avoiding forced selling during downturns. However, concerns remain that dividend obligations and weak equity performance could continue to influence Bitcoin market sentiment in the near term.