In a significant development within the cryptocurrency market, Strategy has emerged as a dominant force in Bitcoin purchases among digital asset treasuries, accounting for an impressive 93% of Bitcoin acquisitions last month. Based in Tysons Corner, Virginia, the firm purchased a staggering 40,150 Bitcoin during this period, dwarfing its competitors, which collectively managed to acquire only 3,080 Bitcoin. This surge in acquisitions marks the busiest month for Strategy in over a year, highlighting its central role in the market at a time when overall demand appears to be contracting.
The total amount of Bitcoin added by digital asset treasuries reached nearly 43,230, equating to approximately $3.5 billion, up from 28,900 Bitcoin in December. However, this still pales in comparison to the substantial 147,000 Bitcoin acquired in November 2024, which correlated with the political climate surrounding President Donald Trump’s re-election campaign. The shift in sentiment regarding digital asset treasuries has been pronounced over the past six months, particularly following a sharp 70% decline in Strategy’s stock price, which has raised concerns among investors about the sustainability of its business model.
As of the last report, Strategy’s shares traded around $125, stirring questions about future performance. Despite these setbacks, co-founder and Executive Chairman Michael Saylor has reiterated the potential of Strategy as a “digital fortress,” maintaining that the company is well-positioned to continue its Bitcoin acquisitions. The firm disclosed a significant loss of $12.4 billion for the fourth quarter, with its Bitcoin holdings reflecting substantial paper losses. Yet, Saylor remains resolute that Strategy is not in a position to sell its holdings, stating the firm intends to keep buying “forever,” even amidst a turbulent market.
A growing concern among analysts is that many Bitcoin-buying firms could find themselves in forced selling situations due to their corporate structures. With the average acquisition price for Bitcoin among these firms hovering around $90,000, last month saw four public companies, including prominent Bitcoin miners Riot Platforms and Bitdeer, offload portions of their Bitcoin holdings. Specifically, Riot sold 1,363 Bitcoin, while Bitdeer let go of 490 Bitcoin. Other companies like Exodus Movement and Bitcoin Treasury Corp also reduced their stakes.
In a diversified approach toward its operations, Strategy has utilized different financial instruments, including debt and various types of preferred shares. The company’s variable rate preferred share (STRC) has seen significant growth, currently valued at $3.4 billion, with annualized dividends of 11.25%. This strategic maneuver has resulted in added costs, yet the company has managed to accumulate cash reserves to meet these obligations.
Moreover, the activity among Bitcoin-buying firms has seen a notable increase, with January witnessing 30 companies announcing purchases, up from 20 in December. This uptick reflects a lingering interest in Bitcoin, despite the turbulent market conditions. Although Strategy’s stronghold on Bitcoin purchases among publicly traded companies is evident, the broader impacts of these activities remain a crucial area for investors and industry analysts to monitor moving forward.
