Bitcoin’s recent surge, climbing approximately 20% since February, has garnered significant attention, with analysts pointing to influential figures in the cryptocurrency space. Among them, Matt Hougan, Chief Investment Officer at Bitwise, credits Michael Saylor, chairman of Strategy Inc., as a crucial driver of this momentum.
In a notable move, Strategy Inc. has acquired $7.2 billion worth of Bitcoin over the past eight weeks, significantly surpassing the $3.8 billion in inflows seen in exchange-traded funds (ETFs) since March 1. This aggressive purchasing strategy has been financed entirely through the issuance of STRC, Strategy’s perpetual preferred stock, which boasts an annual yield of 11.5%.
Hougan elaborated on Strategy’s approach to STRC, stating that the company’s goal is for the stock to maintain a trading price of $100 per share, all while providing attractive dividend yields. The firm has a mechanism in place to stabilize this price point by adjusting the yield. Should STRC fall below $100, Strategy can increase the interest rate to entice potential buyers. Conversely, if the stock trades above that mark, they can either issue additional shares or reduce the rate.
Since its inception in July 2025, STRC has experienced a rise in yield from 9% to its current 11.5%. This increase has been driven by a strategy of periodic dividend adjustments aimed at keeping the share price close to $100.
To sustain the substantial 11.5% dividend, Strategy primarily raises funds from additional investors. These new shares are sold, and the proceeds are utilized for dividend payments. The preferred stock issued by Strategy is secured against the firm’s substantial Bitcoin holdings, which are valued at about $63 billion. While the company carries $8 billion in debt and $14 billion in preferred equity, preferred stockholders are prioritized above common shareholders in the event of liquidation. This arrangement means that upon liquidation, the debts would be settled first, followed by the preferred equity, leaving $41 billion for common shareholders.
Looking to the future, Bitwise suggests that more issuance of STRC is likely on the horizon. Currently, Strategy could theoretically cover its existing dividend obligations for 42 years based on current Bitcoin prices, and with a potential 20% annual increase in Bitcoin value, the company may sustain dividend payouts indefinitely. Rumors indicate that Strategy could have raised an even larger amount of capital in previous offerings if desired.
As the appeal for STRC grows—particularly in light of current junk bond yields falling below 7%—investors seem drawn to the robust 11.5% yield, particularly considering it is underpinned by over $40 billion in Bitcoin assets. However, Hougan notes that the percentage of Strategy’s total obligations relative to its Bitcoin holdings is a critical figure to monitor. With this ratio currently at 33%, representing $21 billion in obligations against $63 billion in Bitcoin, analysts warn that if this figure approaches 50%, it may raise flags among investors.
Under the prevailing Bitcoin prices, Strategy has the potential to issue an additional $10 billion to $15 billion in STRC, with prospects for even more if Bitcoin continues to rise. Hougan firmly believes the issuance of STRC is far from over, suggesting a positive outlook for the company amidst a dynamic cryptocurrency market.
