Strategy, the software company turned Bitcoin treasury vehicle led by Michael Saylor, sold 32 coins for roughly $2.5 million between May 26 and May 31 - only the second time the company has ever sold Bitcoin. The move came after Strategy signaled a departure from Saylor’s prior "never sell" stance, announcing it would actively manage its balance sheet and sell Bitcoin where such actions improve per-share metrics or strengthen its financial position.
Citi’s equity analysts said the divestment was not unexpected. They had previously noted, following Strategy’s first-quarter results call, that the company appeared to be moving toward greater portfolio optimization, including the sale of tax-disadvantaged Bitcoin holdings.
"An announcement of small digital asset treasury selling has had an outsized effect on BTC in our view but does not alter the fundamental backdrop," the analysts said.
That assessment frames a broader view from the bank: while headlines about treasury sales can move markets in the short term, the underlying drivers of Bitcoin’s price performance lie elsewhere. Citi continues to identify ETF flows as the dominant factor behind Bitcoin appreciation, estimating that such flows account for approximately 45% of weekly return variation. The bank sees ETF flows as the most immediate measure of new investor adoption.
On that point, Citi flagged a less encouraging development: recent ETF flows have turned negative, and the bank expects sentiment to remain muted for the time being. "We expect sentiment to remain lackluster, especially as the divergence with equity performance remains stark, absent positive news on the regulatory front or "de-basement trade" fears around fiscal positions," the analysts said.
A closely watched potential catalyst for renewed demand is progress on a U.S. market structure bill. Citi views passage of such legislation as a possible trigger for fresh investor interest, but the analysts judge the probability of passage this year to be declining - they still put it at roughly 50%.
"The declining chances of passage and disappointing price action relative to equities reduce the urgency for new investors and their advisors, impacting potential upside," the analysts said.
Citi also addressed the potential broader impact of selling by companies that hold digital assets on their balance sheets. The bank’s view is that such sales are unlikely to become a sustained, material negative for Bitcoin prices, because treasury inflows and outflows generally move in step with ETF flows.
Using an activity-based model, Citi estimates a fair value range for Bitcoin between $76,800 and $82,500 - a level it notes is above current trading prices. The model-based range encapsulates the bank’s view of where intrinsic value would sit given its activity assumptions.
The analysts extended their commentary to Ethereum, noting that adoption remains the central variable for that network. They highlighted stablecoin usage and tokenization activity - and specifically whether those functions are built on the Ethereum network - as the primary items to monitor for Ethereum’s outlook.
Context and implications
From Citi’s perspective, Strategy’s sale was a tactical balance-sheet decision rather than a signal of structural weakness in Bitcoin demand. For market participants focused on flows and investor adoption, ETF activity and the trajectory of U.S. regulatory action remain the key indicators to watch.