Strategy’s latest massive bitcoin purchase offers insight into its evolving funding model

Strategy (MSTR) has, for the first time last week, used its perpetual preferred stock as the primary vehicle to accumulate bitcoin, marking a potential shift in how the company funds its bitcoin strategy.

The company Monday announced it purchased 22,337 $BTC in the preceding week, its fifth-largest acquisition on record.

Issuance through its STRC perpetual preferred stock was $1.18 billion, equivalent to roughly 16,800 $BTC at the average price of $70,000, far exceeding the $396 million raised via its common stock at-the-market (ATM) program, which had historically been the primary tool used to build its bitcoin holdings, now totaling 761,068 $BTC.

At STRC’s current 11.5% dividend rate, the $1.18 billion issuance implies roughly $135 million in annual dividend obligations. This has pushed the company’s total annual dividend burden above $1 billion.

That said, the company has set aside approximately $2.25 billion in USD reserves to fund these obligations, providing a buffer amid rising capital costs.

With the company’s common stock down more than 70%, it appears incentivized to support a higher share price without further dilution.

As a result, common equity may be used more selectively, primarily when mNAV (multiple to net asset value) is meaningfully above 1 or when the company looks to build USD reserves. In practice, this suggests reduced reliance on common stock sales, while leaning more heavily on STRC, which avoids issuing new common shares.

Taken together, Strategy is increasingly funding bitcoin accumulation through its preferred capital base, with STRC now at the center of that approach.

Another dividend increase incoming?

STRC is showing early signs of pricing pressure. The preferred has now spent three consecutive days trading below its $100 par value following its March 15 ex-dividend date. With its one-month volume-weighted average price below par, the company may look to increase the dividend by a further 25 basis points to support the price.

Read More: The math behind Strategy’s path to 1 million bitcoin by the end of 2026