Strategy’s latest large-scale bitcoin buy sheds light on its shifting funding approach

Strategy appears to be reshaping how it finances its bitcoin accumulation, leaning more heavily on preferred equity after a $1.18 billion raise signaled a shift away from common stock.

Last week marked the first time the company relied primarily on its STRC perpetual preferred stock to fund purchases. On Monday, Strategy disclosed it had acquired 22,337 BTC over the prior week — its fifth-largest bitcoin purchase to date.

The bulk of the funding came from $1.18 billion raised through STRC, equivalent to roughly 16,800 BTC at an average price near $70,000. This far exceeded the $396 million generated via its at-the-market (ATM) common stock program, which had historically been its main funding tool. Strategy’s total bitcoin holdings now stand at 761,068 BTC.

However, the shift comes with added costs. At STRC’s current 11.5% dividend rate, the latest issuance implies about $135 million in annual payouts, pushing the company’s total dividend obligations beyond $1 billion per year.

To manage these commitments, Strategy has set aside approximately $2.25 billion in cash reserves, providing a cushion as funding costs rise.

The move also reflects pressure on the company’s equity. With its common stock down more than 70%, Strategy appears motivated to avoid further dilution while supporting its share price. As a result, common equity issuance may become more selective — likely reserved for periods when its multiple to net asset value (mNAV) is well above 1 or when the firm needs to build additional cash reserves.

In practice, this points to reduced reliance on common stock sales and a growing dependence on preferred capital, with STRC emerging as the centerpiece of Strategy’s funding model.

There are also early signs of strain in the preferred market. STRC has traded below its $100 par value for three consecutive days following its March 15 ex-dividend date. With its one-month volume-weighted average price now below par, the company may opt to raise the dividend by another 25 basis points to help support the share price.