Led by Michael Saylor, Strategy, previously known as MicroStrategy, now holds more Bitcoin than BlackRock’s iShares Bitcoin Trust (IBIT), making it the largest institutional holder globally. According to a recent SEC filing on April 20, Strategy acquired an additional 34,164 Bitcoins at an average price of $74,395 each over one week, costing them approximately $2.54 billion, marking their third-largest purchase by quantity. This transaction increased their total Bitcoin holdings to 815,061 BTC, or about 3.88% of the cryptocurrency’s overall supply, with an investment nearing $61.56 billion and an average cost basis of $75,527 per coin. Despite a current trading price near $75,000, Strategy faces an unrealized loss exceeding $228 million.
Strategy has overtaken IBIT, which holds 798,026 Bitcoins after initially surpassing Strategy in early 2024 due to the introduction of spot Bitcoin ETFs in the U.S. Unlike BlackRock’s fund that serves both retail and institutional investors via a regulated structure, Strategy operates as a publicly traded company using debt and equity markets for leverage.
The latest buy-up increased Strategy’s Bitcoin yield by 82% to $4.97 billion within one week, highlighting the benefits of combining digital assets with strategic financing, according to CEO Phong Le. Analysts anticipate Strategy might reach 1 million Bitcoins before year-end.
STRC plays a crucial role in funding these purchases without heavily diluting common shares. The filing noted STRC’s perpetual preferred security generated $2.18 billion last week, covering about 85.7% of the purchase cost. STRC aims to maintain its stock value near par and limits valuation volatility by offering an 11.5% annualized variable dividend.
While Strategy’s sophisticated funding has evolved, market reactions to their purchases remain consistent. Large acquisition announcements often trigger a buy-the-rumor, sell-the-news effect on Bitcoin prices rather than immediate bullish impacts. Andre Dragosch from Bitwise Europe explains this as countercyclical behavior where the buying is already priced in by announcement time.
Bitwise’s research indicates that since August 2020, Bitcoin typically peaks about two hours before Strategy’s disclosures and then declines post-announcement. For larger purchases, the trend shows a rise leading up to disclosure followed by a sell-off thereafter. Conversely, smaller acquisitions lead to steadier gains after announcements.
Market analysts suggest that quieter accumulations might signal more sustainable demand than headline-grabbing buys. Consequently, Strategy’s weekly filings should not be relied upon for short-term trading signals.