Strategy's Era as Bitcoin's Top Buyer Is Over, Says Bitwise CIO — What Comes Next

In a July 1, 2026 memo titled "STRC, MSTR, and End-of-Cycle Dynamics," Bitwise Chief Investment Officer Matt Hougan made a striking call: Strategy (formerly MicroStrategy) has been the most dominant Bitcoin buyer in the world, but those days are likely over. The memo, covered by multiple crypto and financial news outlets, lays out a structural shift in the corporate Bitcoin market and explains why this transition may actually be healthy for the asset .

Hougan's Core Thesis: Strategy's Era as the Dominant Buyer Is Over

Hougan stated that Strategy has been "the most dominant bitcoin buyer in the world" and a purely one-way source of demand for years, but "those days are likely over." He argued the company will now play a much smaller role in driving Bitcoin's demand in the next market cycle as it transitions from a compulsive accumulator to an active treasury manager .

The Structural Shift: Strategy's New Capital Framework

The change was triggered by Strategy's adoption of a Digital Credit Capital Framework on June 29, 2026, which fundamentally rewrote its previous four-year "buy only" script . The key components:

• $1.25 billion Bitcoin sale authorization (BTC Monetization Program): The board authorized the sale of up to $1.25 billion worth of Bitcoin to fund its USD Reserve, pay preferred dividends, and support other corporate obligations .
• 12% STRC preferred dividend: In response to market pressure and to keep the STRC perpetual preferred stock trading near par, Strategy raised the annualized dividend yield to 12% .
• $2.55 billion cash reserve: A board-approved USD reserve policy was established to strengthen the balance sheet .
• $2 billion in buyback programs: $1 billion for common stock and $1 billion for preferred securities (STRC) .
• Abandonment of the "never sell" stance: The company built its entire identity on never selling Bitcoin. This framework allows management to sell BTC when it is deemed advantageous, marking a complete reversal .

How this affects buying behavior: Strategy is no longer a one-way, unconditional buyer. Because it now has a mechanism and authorization to sell, it can buy or sell Bitcoin depending on market conditions. According to Hougan, the market is now forced to price in the risk that Strategy may sell into strength or sell to fund its dividend obligations, which structurally reduces its role as a pure demand driver .

Who Hougan Expects to Drive the Next Phase

Hougan predicted that institutional investors will emerge as the key buyers in the next Bitcoin market cycle . He specifically pointed to:

• Spot Bitcoin ETF inflows — which he previously credited alongside Strategy's buying for driving price recovery .
• Long-term holders returning to accumulation .

The baton is effectively being passed from a single corporate buyer (Strategy) to a broader base of regulated institutional capital flowing through ETFs and other vehicles.

Why Hougan Says This Transition Is Not Bearish for Bitcoin

Despite Strategy stepping back, Hougan argued the development is not bearish for Bitcoin. His reasoning:

• STRC deleveraging is a natural end-of-cycle dynamic, not a fundamental failure for Bitcoin . The volatility in STRC was a "classic end-of-cycle dynamic" reflecting market concerns about Strategy's ability to fund dividends, not a judgment on Bitcoin itself.
• The selling is likely finite and manageable. The $1.25 billion authorization is small relative to Bitcoin's daily trading volume and Strategy's total holdings of roughly 847,000 BTC (~$50+ billion at the time) .
• New buyers are stepping in. Institutional inflows through ETFs and other channels are expected to more than compensate for any reduction in Strategy's buying .
• Bitcoin may be near a cyclical bottom amid the STRC deleveraging process, suggesting the worst of the selling pressure is already priced in .

In short, Hougan views the shift as a maturing of the market — from one dominant corporate whale to a broader, more sustainable institutional bid — and not a signal that Bitcoin's long-term trajectory has changed.