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Michael Saylor, Chairman of the Board of Strategy, stated that Bitcoin has achieved a major victory. However, he now says the main risks for the first cryptocurrency lie within the community itself. Against this backdrop, his company has not replenished its BTC reserves for five weeks. This is not a coincidence — behind the pause lies a complex financial and technical logic.

Analysts at Arkham have studied the reasons for this behavior. Instead of buying Bitcoin, Strategy has built up a substantial cash reserve of $3.75 billion. Thus, the organization is simultaneously implementing two opposing strategies: increasing its dollar cushion and temporarily freezing cryptocurrency purchases.

Why Saylor is sounding the alarm right now

The timing of Saylor's statements is linked to upcoming changes in the Bitcoin network. At the center of the discussion is proposal BIP-110, which is a soft fork. It limits the amount of arbitrary data within transactions. Developer Dayton Om has already included the update in the Bitcoin Knots client. Miners began signaling support on December 1, 2025, although most ignored the initiative. The process, nevertheless, continues.

According to the implementation schedule, the mandatory lock-in phase will begin in August 2026. From that point, blocks without a support signal will be considered invalid. After this, the activation of BIP-110 becomes guaranteed. Another two weeks later, the rules come into effect, and approximately one year later, they automatically expire.

Saylor criticizes not the voting procedure itself, but the rigidly prescribed timeline that is set to launch shortly. He highlighted three key problems: BIP-110 introduces censorship for legitimate transactions; covenants open new attack vectors on the network; and increasing block sizes reduces blockspace scarcity and raises transaction verification costs.

Saylor's main technical grievance concerns miner revenue. Block subsidies are halved every 210,000 blocks, so an increasing portion of Bitcoin's security budget falls on fee payments. He believes that weakening the fee market reduces the network's resilience. Proponents of the initiative disagree: they argue that unsystematic data investments overload nodes and crowd out real payments.

Saylor is far from the only critic. Blockstream CEO Adam Back also opposes BIP-110, but his concern is less about censorship and more about the activation threshold being too low at 55%, which opens up risks of a hard fork. Saylor previously called BIP-110 the biggest internal threat to Bitcoin.

Why Strategy stopped buying Bitcoin

Raising capital through equity proved more advantageous than deviating from the chosen financial plan. The 8-K report filed on July 27 confirms a $525 million increase in the dollar reserve. The total amount reached $3.75 billion — according to the company's estimate, this is enough to pay dividends for 2.1 years, given annual obligations to preferred stock holders of approximately $1.76 billion.

Strategy raised this money through equity offerings, not by selling Bitcoin. The company recently sold MSTR shares worth $544.5 million, of which approximately $467 million and another $263.5 million came from issuances two weeks prior. Over three weeks, total share sales amounted to about $1.26 billion.

Shares had to be issued cheaply. MSTR is currently trading at $96.66 — about 76% below its 52-week high of $414.36. Now, for every new dollar raised, the company must give up a much larger share than a year ago.

How far is Strategy from its 1 million BTC goal

Strategy announced it aims to accumulate 1 million BTC by the end of 2026. The company currently holds 843,775 BTC. It is short by 156,225 BTC. About 22 weeks remain until the end of the year. To close the gap, it would need to buy approximately 7,000 BTC per week — about $447 million at the current price. The company is currently not buying Bitcoin at all.

What BTC and MSTR investors need to know

The company's average cryptocurrency acquisition price is $75,494 per coin. The Bitcoin exchange rate is around $63,817. The price has deviated nearly 49% from its October 2025 peak of $126,080. The current portfolio revaluation shows an unrealized loss of $9.9 billion.

Bitcoin needs to rise by about 18% for Strategy to at least break even. The current exchange rate does not facilitate this. The urgency is explained by the situation with preferred shares. STRC shares are trading around $88.86 — about 11% below their $100 par value, despite a dividend increase to 12% starting July 1 and the launch of a buyback. It was the pressure on STRC that influenced the decision to launch the Digital Credit Capital Framework on June 29, which authorized share buybacks and Bitcoin sales of up to $1.25 billion.

In the next 30 days, three events are worth watching: the opening of the mandatory signaling window for BIP-110 in August, the publication of Strategy's weekly reports and a possible record for the pause duration, and the use of the $3.75 billion reserve to prevent Bitcoin sales from the $1.25 billion limit.

Expert comment: Strategy's pause in BTC purchases is not a sign of disappointment in Bitcoin, but a forced measure in the face of a falling stock market and growing obligations to preferred shareholders. Saylor is clearly betting that Bitcoin will recover to levels above the average acquisition price before resuming aggressive purchases. However, time is running out: if BTC does not show growth in the coming months, the company will either have to sell coins or seek new sources of capital.