Bitcoin Giant Strategy Moves to Retire $1.5 Billion in Convertible Debt, Says It Could Sell BTC

Strategy announced Friday that it is taking significant steps to pare its pile of convertible debt, striking a deal to buy back $1.5 billion of notes maturing in 2029.

The Bitcoinpurchasing firm said a file that it expects to pay about $1.38 billion to service debt the company took on in November 2024 to expand its crypto cache, representing a significant portion of $8.2 billion the company has borrowed in recent years.

Co-founder and Executive Chairman Michael Saylor indicated in February that the company would seek to “equitize” its convertible notes – which investors can trade for common stock – over the next three to six years if the shares cross a certain threshold.

As the company that manages $65 billion worth of Bitcoin increasingly leans on its favorite stock, Stretch (STRC), to expand its Bitcoin holdings, the company’s efforts to pay down some of its convertible debt align with a broader deleveraging effort.

While Strategy’s Bitcoin investments posted billions of dollars in losses earlier this year — with the digital asset falling to a low of $62,850 in February — the looming liabilities of upcoming maturities tested confidence in the company’s long-term sustainability. These questions were exacerbated by regular dividend payments that Strategy committed to through STRC.

It changed hands for about $178 shortly after Friday’s opening bell, according to the largest corporate holder of Bitcoin shares Yahoo Finance. Since the beginning of the year, the company’s share price has risen 18%, although it is still well below last year’s high of $457.

In the filing, Strategy said it plans to fund the buybacks using available cash reserves, proceeds from its common stock program in the marketplace, “and/or proceeds from sales of Bitcoin.”

Traders on Myriad, a prediction market owned by Declutter parent company DASTAN, currently expect a 90% chance that strategy will sell Bitcoin before the end of this year. A month ago, traders estimated only a 12% chance that the company would tap its crypto cache.

Despite spending years cultivating a buy-and-never-sell attitude toward Bitcoin, Saylor remains said this month during the company’s first-quarter earnings call: “We’ll probably sell some Bitcoin to fund a dividend, just to inoculate the market — just to send the message that we’ve done it.”

The comment was made in reference to STRC, which currently offers an 11.5% annual dividend paid monthly. Since Strategy began offering the product to investors in July, STRC’s market capitalization has ballooned to $8.4 billion, despite increased issuance in recent months.

When Strategy repurchases notes maturing in 2029, the company will have $1.5 billion in convertible debt outstanding from that tranche. Additionally, the company has issued about $1 billion in notes that could force investors to buy back the company as early as September 2027.

The company’s efforts to pay down debt come as industry peers plan similar moves. On Thursday, Strive, which runs the ninth largest Bitcoin treasury, said announced that it had eliminated outstanding debt by buying back long-term bonds at fair value.