Polymarket Backlash After Strategy Inc. 32 BTC Sale Ruling

Polymarket is facing trader backlash after Strategy Inc., formerly MicroStrategy, disclosed a 32 BTC sale in a June 1 Form 8-K and Polymarket ruled the company’s public confirmation arrived outside the market’s resolution timeframe.

Strategy’s filing states the sale ran from May 26 through May 31 and generated roughly $2.5 million in proceeds. The company said the funds will be used to cover preferred stock distributions at about $77,135 per coin. The 32 BTC equals about 0.0038% of Strategy’s reported 843,706 BTC treasury and is the firm’s first reported sale since December 2022.

The contested Polymarket event, titled ‘MicroStrategy sells any Bitcoin by May 31, 2026?’, has attracted about $85 million in total volume. The May 31 slice of the market holds roughly $53.86 million in open positions. Polymarket estimates more than $20 million in positions are affected by the dispute over whether the timing of the public disclosure or the timing of the sale itself should determine settlement.

Polymarket operators said they did not find filings, on-chain transfers, or other credible reporting that confirmed a sale within the market’s stated resolution window and therefore did not accept the later confirmation. Polymarket markets settle using UMA oracle infrastructure. Contested outcomes can be escalated to UMA’s Data Verification Mechanism, where token holders vote on the correct resolution in a 48- to 96-hour window.

Market participants noted 32 BTC is too small to have moved the price of Bitcoin. One user wrote they had “lost a lot of faith in Polymarket,” adding they believed the company’s confirmation was made before the market cutoff for resolution.

Analysts flagged Strategy’s capital pressures, including about $15 billion in preferred stock obligations and recent convertible debt buybacks that reduced liquidity. Those factors were cited as context for why the company sold a tranche of Bitcoin. The sale also ended a long-running perception that founder Michael Saylor and the company were not selling from the treasury.

If the dispute is escalated to UMA’s Data Verification Mechanism, token-holder voting will decide whether the market resolves to ‘Yes’ or ‘No.’ That vote will determine payouts on millions of dollars of open positions.