Strategy disclosed on Monday that it invested $1 billion into Bitcoin last week, utilizing proceeds exclusively from its flagship preferred share to expand its holdings.
In a statement, the firm announced that it now possesses nearly 781,000 Bitcoin, marking a 1.8% increase from the previous week. With Bitcoin trading at approximately $70,900, the company’s holdings are valued at $55.3 billion according to CoinGecko.
Based in Tysons Corner, Virginia, Strategy executed its most substantial purchase of roughly 14,000 Bitcoin in nearly a month. Concurrently, it issued significant amounts of its variable-rate preferred shares, STRC, for the second consecutive week.
The product offering an 11.5% monthly dividend has become central to Strategy’s recent acquisitions, serving as a funding alternative to common shares that have declined 57% over six months. Following Monday’s market opening, Strategy’s stock fell about 2.5%, trading at $125.50 per share according to Yahoo Finance.
Strategy’s acquisition demonstrates its capability under co-founder and Executive Chairman Michael Saylor to accumulate Bitcoin without diluting common shareholders—a concern raised by observers as the stock price dropped last year.
On Monday, it was noted that Strategy is close to surpassing BlackRock’s spot Bitcoin exchange-traded fund, which holds about 790,000 Bitcoin according to CoinGlass. If inflows remain stable over the next week, Strategy would need an additional purchase of roughly 9,000 Bitcoin to exceed this Wall Street leader.
Since its launch in July last year, the Bitcoin-focused entity has raised $3.55 billion via STRC, surpassing the preferred share’s $2.5 billion public offering. Despite being marketed as a savings alternative for risk-averse investors like retirees, STRC adoption among other Bitcoin-buying firms has grown recently.
Following its latest issuance of STRC—designed to trade near its $100 par value—Strategy now faces $1.2 billion in annual dividend obligations per its website. When the share trades above this level, Strategy issues more STRC to expand its holdings.
The firm’s recent reliance on STRC has led to questions about sustainability. To alleviate concerns over consistent dividend payments, it bolstered cash reserves by $2.25 billion last year.
In a post on Sunday, Saylor stated that the company’s ARR, or the ratio of annual dividends and interest expense to its bitcoin holdings’ market value, currently stands at approximately 2.05%.
“Our BTC Breakeven ARR is ~2.05%. If Bitcoin grows faster than that over time, we can cover our dividends indefinitely without issuing new $MSTR shares,” he tweeted, hinting at pressure from past common share issuances on shareholders.
TD Cowen analyst recently reduced their Strategy price target for the second time this year to $350 from $440, reflecting a lower anticipated Bitcoin price. Despite this, they maintained a “Buy” rating for the firm.
Traders on Myriad, owned by Decrypt’s parent company Dastan, are increasingly confident that Strategy will not reduce its holdings this year. They foresee only a 12% chance of a sale in 2026, down from 18% last month.