Benzinga and Yahoo Finance LLC may earn commission or revenue on certain items via the links below.
strategy This may have created capital structure problems that could lead to losses BitcoinAccording to a leading industry expert, MSTR shareholders or preferred holders.
Changing risk profile of the strategy
Speaking on Unchained’s “Bits + Bips” podcast, Arca Chief Investment Officer Jeff Dorman Said the strategy’s decision to add larger, preferred stock obligations changed the risk profile Michael Saylor‘s Bitcoin strategy.
The strategy recently disclosed that it sold 32 bitcoins for approximately $2.5 million in late May, a remarkable turnaround for a company long known as one of the most aggressive buyers of bitcoin.
Don’t miss:
Dorman said the sale itself was small, but the sign was big.
Central to the concern is the strategy’s preferred stock structure, which Dorman said now carries about $1.7 billion in annual dividend obligations.
Unlike earlier convertible debt, those preferred dividends create a recurring cash need for a company whose core business does not generate enough cash to fund them.
Dorman said there are now several options for strategy, but none are clear cut.
Selling Bitcoin puts pressure on BTC sentiment, selling stocks dilutes MSTR holders, issuing debt affects credit quality, cutting preferred dividends can liquidate preferred shares and lead to lawsuits.
“Somebody’s going to lose badly here,” Dorman said.
See also: Avoid the #1 Investing Mistake: How Your ‘Safe’ Holdings Can Cost You Big Time
Risk and capital structure pressures of BTC holders
Dorman said Bitcoin investors now face a new problem: Strategy, the world’s largest corporate Bitcoin holder, has shown it can sell.
He argued that the strategy might be better than selling a large Bitcoin block at once and explicitly stating that it has met dividend needs, rather than “teasing” future sales.
Higher Bitcoin prices could increase MSTR, restoring confidence and allowing companies to more easily raise capital.
But if Bitcoin remains stagnant or continues to fall, Dorman says the strategy’s cycle weakens.
He also noted that Strategy’s recent move to pay off 2029 convertible debt reduced its cash cushion and shortened the runway for funding the preferred dividend.
Image: Shutterstock
Read further:
Creating more wealth than just the market
Building a flexible portfolio means thinking beyond any single asset or market trend. Economic cycles change, sectors rise and fall, and no one investment performs well in every environment. That’s why many investors seek to diversify with platforms that offer access to real estate, fixed income opportunities, precious metals, and even self-directed retirement accounts. By spreading exposure across multiple asset classes, it becomes easier to manage risk, achieve stable returns and build long-term wealth that is not tied to the fortunes of just one company or industry.
arrived
Backed by Jeff Bezos, Arrived Homes makes real estate investing accessible with a low barrier to entry. investors can Buy fractional shares of single-family rentals and vacation homes starting at $100. It allows everyday investors to diversify into real estate, collect rental income and build long-term wealth without the need to directly manage the properties.
Vinovest
Fine wines and rare whiskeys have historically moved independently of the stock market, making them an attractive alternative asset. Vinovest manages certified, insured portfolios of investment-grade wines and whiskeys starting at $5,000 – Sourcing, storage and insurance all handled for you.
farm together
Farmland has historically retained its value despite market volatility and delivered returns unrelated to stocks and bonds. For accredited investors, FarmTogether provides direct access to high quality US farmland starting at $15,000 – Fully managed, without any landlord headaches.
equity multiple
For accredited investors looking beyond stocks and bonds, EquityMultiple provides access to verified commercial real estate deals starting at $5,000, Only ~5% of opportunities go through their due diligence process.
Bitcoin IRA
For investors who want crypto exposure with tax benefits, The Bitcoin IRA allows you to trade 60+ cryptocurrencies inside a Self-Directed IRA or roll over an existing 401(k), With 24/7 trading and institutional cold storage. Minimum $3,000 to start. Crypto investing involves substantial risk of loss and penalties apply for early withdrawals.
© 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
