- Bitcoin Holdings: Increased 11% quarter over quarter, from 769 Bitcoin to 846 Bitcoin.
- Debt Reduction: Total debt reduced from $8.2 billion to $6.7 billion, an 18% decrease on a net debt basis.
- US Dollar Reserve: Increased 12% quarter over quarter to $2.4 billion at the end of Q2, and subsequently to $3.75 billion.
- Bitcoin per Share: Increased 5% quarter over quarter, from 201,170 satoshis to 210,824 satoshis.
- Year-to-Date Bitcoin Purchases: Bought 174,895 Bitcoin and sold 3,620 Bitcoin, resulting in a 25% increase in Bitcoin holdings since the beginning of 2026.
- Digital Credit Issuance: Issued $7.52 billion of digital credit year-to-date, increasing STRC's notional value by 250% since the start of the year.
- Capital Raised: Issued $17 billion of capital through the first 7 months of 2026, with digital credit comprising 44% of the total.
- Q2 Capital Issuance: Raised $8.4 billion in Q2 2026, with $5.5 billion in digital credit, exceeding any quarter of the previous year.
- STRC Notional Value: Grew from $2.8 billion at the end of Q4 to $10.5 billion at the end of Q2.
- STRC Effective Yield: Currently at 13.6%, with a tax-equivalent yield of 21%.
- Institutional Holdings of STRC: Grew from $1.1 billion to $3.1 billion, increasing from 22% to 29% of STRC outstanding.
- Realized Loss on Bitcoin Sales: Recorded a $1 million realized loss on the sale of 32 Bitcoin in May and a $203 million realized loss on the sale of 3,588 Bitcoin in July.
- Potential Tax Benefit: Holds approximately $18.5 billion in unrealized losses on Bitcoin, equating to a potential $5.4 billion tax benefit.
Release Date: July 30, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Strategy Inc MSTR increased its Bitcoin holdings by 11% quarter-over-quarter to 846 BTC and reduced net debt by 18% to $6.7 billion, strengthening its balance sheet.
- The company's Bitcoin per share metric increased by 5% to 210,824 satoshis, demonstrating continued value accretion for shareholders.
- Strategy Inc (MSTR) has established a robust US dollar reserve of $3.75 billion, providing 2.1 years of dividend and interest coverage, which is within its target range of 2-3 years.
- The company's flagship digital credit product, STRC, has become the number one holding in all three major preferred stock indexes (BlackRock PFF, Virtus InfraCap PFFA, and VanEck PFXF), indicating strong institutional demand.
- Management outlined a clear plan to return STRC to par value, including a $1 billion buyback program and a commitment to maintaining a strong US dollar reserve, with a target date of September 8th.
- Strategy Inc (MSTR) has a significant potential tax benefit of $5.4 billion from unrealized losses on its Bitcoin holdings, which can be used to offset future capital gains.
- The company's Bitcoin monetization program is designed to be a small fraction of overall holdings, with sales representing less than 0.5% of total Bitcoin, minimizing market impact.
- Management is actively managing the mix between USD and BTC reserves, aiming to be countercyclical by increasing cash reserves when Bitcoin is at high premiums to its 200-week moving average.
Negative Points
- Strategy Inc (MSTR)'s digital credit product, STRC, is currently trading at approximately $89.50, well below its target range of $99-$100, indicating a significant market dislocation.
- The company sold 3,588 Bitcoin at an average price of $60,000, realizing a $203 million loss to fund dividend payments, highlighting the need to sell assets at a loss to meet obligations.
- Bitcoin faces several macroeconomic headwinds, including competition from AI capital expenditures, trade tensions, Gulf War disruptions, restrictive Fed policy, and delays in regulatory clarity.
- The company's equity is trading at only a 5% premium to its net asset value, suggesting the market is skeptical about the value of its digital credit operating business.
- Management acknowledged that the US dollar reserve was drawn down to 0.5 years of coverage in May, which was not the right level to support STRC and digital credit, requiring a rapid rebuild.
- The company has not yet used its $1 billion MSTR repurchase authorization, and management indicated it would only do so when the stock trades at a sustained discount to net Bitcoin per share, which has not occurred this year.
- Strategy Inc (MSTR) faces a potential overhang from its convertible debt maturities, with the next put date in September 2027, requiring careful liability management decisions.
- The company's Bitcoin sales for tax-loss harvesting purposes have been criticized, and management acknowledged that the sentiment impact of these sales could be negative even if the liquidity impact is minimal.
Q & A Highlights
Q: Would Strategy consider borrowing against its Bitcoin holdings to increase the USD reserve and drive STRC back to par?
A: Phong Le (CEO) stated that while the company has explored borrowing against Bitcoin, the market is not large or well-priced enough for their needs, and counterparty risk is a concern. He emphasized that the company prefers more straightforward methods to build the USD reserve and eschews margin debt or mark-to-market loans to avoid creating an attack narrative for short sellers. Michael Saylor (Executive Chairman) added that they want to aggressively whittle down existing debt and avoid any uncertainties, stating, "we don't need to" borrow against Bitcoin.
Q: Are we at the end of the series of financial instrument innovations, or are more instruments coming down the road? Would you consider selling volatility derivatives as another tool?
A: Michael Saylor (Executive Chairman) stated the company is going in the opposite direction, focusing on consolidation rather than creating new instruments. He noted they have 11 credit instruments and plan to whittle them down over time, keeping STRC as the flagship. Regarding volatility derivatives, he explained that selling volatility would strip value from the equity, fragment liquidity, create tax complications, and undermine trust with market makers. He emphasized, "We're not playing for a billion dollars, Matt, we're playing for $1 trillion," and that the path to becoming the world's most valuable company is creating credit on top of Bitcoin, not selling call options.
Q: Can you help us think through the scenarios where you would equitize or refinance existing convertibles, and comment on the timing of addressing upcoming debt maturities?
A: Andrew Kang (CFO) stated that all options remain open and there is no prescribed rush, with the priority being to get STRC back to par. Phong Le (CEO) provided a specific example: the 2028 converts with a put date in September of next year. If MSTR is trading north of $183, they will equitize it; if not, they have options to sell MSTR at a premium, sell Bitcoin, or refinance, noting that current convertible terms are better than they were in the last 5 years.
Q: Do you see any benefit in selling covered calls or cash-secured puts to optimize Bitcoin acquisition, or does that conflict with the strategy of keeping things simple?
A: Michael Saylor (Executive Chairman) stated that selling volatility is not part of the plan, as it would generate counterparty risk, change the complexity of the equity, and create tax complications. He emphasized that the most lucrative thing they can do with a coin is sell credit against it, not sell volatility. He noted, "There's only one company in the world that can sell credit at our scale, and that's us," and that the focus is on getting the digital credit reactor up and running without creating opacity.
Q: Is Bitcoin an asset, digital Manhattan, or money? Do instruments like the preferred squeeze out people from discovering real bearer Bitcoin?
A: Michael Saylor (Executive Chairman) explained that marketing is aimed at the 99% of people who don't own Bitcoin and won't buy it directly. He stated that Bitcoin is money, but the rest of the world defines money as fiat-pegged assets. He emphasized that digital credit allows them to tap into the multi-hundred-trillion-dollar credit market, channeling capital into the Bitcoin ecosystem that couldn't otherwise buy the underlying asset. He concluded, "We like Bitcoin to become 100 times bigger than it is. And that means we need 100 times more money. And it's other people that have the money."
Q: Would you consider raising the minimum number of months of USD reserve coverage (currently 12 months) as a mechanism to get STRC closer to par?
A: Phong Le (CEO) stated that the best way to get STRC to trade at par is through a commitment to the USD reserve and increasing the actual number, not necessarily increasing the minimum. He noted that other levers include the repurchase program and Bitcoin price appreciation. He said, "Would we increase the minimum US dollar reserve, maybe at some point, I think a year is good... how much we have in the US dollar I think matters even more."
Q: Do you have current guidance on a target level of overall amplification in the capital structure, and do you plan to be more countercyclical in your approach to capital issuance?
A: Michael Saylor (Executive Chairman) stated that they have developed an appreciation for actively managing the mixture between USD and BTC, noting that being 98-99% BTC-focused was counterproductive. He said they will be staring at metrics like the premium to the 200-week moving average and will be countercyclical, leaning toward dollars at high premiums and toward BTC at discounts. He noted, "I don't think you'll see 100% BTC as the norm, I think it'll be a ratio" driven by market sentiment and credit market demands.
Q: What is the company's plan to return STRC to par, and what is the timeline?
A: Michael Saylor (Executive Chairman) stated that returning STRC to par is the goal, and they are in a discovery process to determine how much capital will be required. He noted that when STRC fell below the trading range on May 28th, it has been 40 trading days, and they are tracking a 70-day target (around September 8th) based on the IPO experience. He emphasized they have a $1 billion buyback program (with $975 million available) and ample additional capital to cure the dislocation, stating, "We're certain that we will return STRC to par."
Q: Can you provide more clarity on the Bitcoin monetization program and the rationale behind the recent Bitcoin sales?
A: Phong Le (CEO) explained that the first sale of 32 Bitcoin (0.004% of holdings) was to "inoculate the market and test our processes," resulting in a $1 million realized loss. The second sale of 3,588 Bitcoin (0.4% of holdings) was to fund June dividends, generating $216 million in proceeds and a $203 million realized loss, which provides a potential tax benefit. He emphasized that these sales are "almost not noticeable compared to our total Bitcoin holdings" and that the company remains a net buyer, having bought 48x more Bitcoin than it sold year-to-date.
Q: What are the headwinds and tailwinds currently affecting Bitcoin, and how is
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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