The bitcoin market also evolves in step with the financing choices of companies that accumulate it. Strategy and Strive use preferred stock to attract investors looking for regular income. However, the dividends associated with these securities create recurring expenses that limit their purchasing capacity. Between acquisitions of cryptocurrencies, repurchases of securities and cash reserves, these companies must now find a financial balance to pursue their strategy without weakening their commitments.
In brief
- Strategy and Strive use preferred stock to finance their bitcoin acquisitions.
- Recurring dividends increase financial costs and limit the capital available to purchase bitcoins.
- Strategy spent $193 million buying back STRC shares, compared to 267 bitcoins purchased.
- US spot Bitcoin ETFs retain their central role, with $57 billion in cumulative net inflows.
Dividends weigh on Bitcoin purchases
Perpetual preferred shares open a new avenue for investors seeking income indirectly linked to bitcoin. Mark Palmer, an analyst at StoneX, believes that these products attract an audience that ETFs had not been able to reach. In particular, they allow yield-oriented investors to access this asset class without depending solely on listed funds.
Ryan Rasmussen, head of research at Bitwise, agrees with this analysis. According to the CoinDesk reporthe nevertheless believes that ETFs will remain the main source of demand in the long term. According to him, perpetual preferred shares could complement this channel by attracting investors with different objectives. Their development will therefore depend as much on their capacity to distribute income as on market conditions.
James Butterfill, head of research at CoinShares, highlights the scale of capital mobilized by these instruments. Strategy’s STRC stock, which offers a variable dividend ofabout 12%raised $7.5 billion between 2026 and the end of July. These funds facilitate acquisitions, but they also result in regular payments. Companies must therefore preserve sufficient resources to finance their dividends while continuing their purchases of cryptocurrencies.
Strategy and Strive facing a delicate financial balance
Strategy’s preferred shares and products offered by Strive, including SATA, do not only track changes in the price of bitcoin. Alex Blume, founder and director of Two Prime, explains that their value also depends on the management of companies, their financial obligations and capital market conditions. Investors must therefore consider several factors before evaluating these securities.
The temporary drop in STRC around $70 at the end of June illustrates the risks associated with these instruments. Strategy’s preferred stock is currently trading around $99.40. For issuers, increasing issuance can increase the number of bitcoins held per common share. However, this policy also increases dividend commitments and complicates reserve management.
Management must therefore choose between several financial objectives. It is seeking to strengthen its bitcoin holdings, meet its commitments to preferred stock holders and avoid selling its digital assets. These constraints become stronger when financing conditions deteriorate. In this context, the strength of cash reserves plays an important role in maintaining payouts without excessively reducing acquisitions.
Share buybacks compete with acquisitions
Mark Palmer points out that the demand for perpetual preferred shares results in regular financial obligations. However, the ability to finance new purchases also depends on the price at which companies can issue these securities. When their price falls below their par value, new issues become less attractive. Companies may then prefer to buy back their own shares rather than raise additional capital.
Strategy’s latest weekly update illustrates this trade-off. According to James Butterfill, the company spent $193 million buying back STRC shares, compared to just 267 bitcoins purchased. It also increased its authorization to repurchase preferred shares to $3 billion. These transactions may reduce future dividend expenses, but they raise capital that could otherwise finance new acquisitions.
Cash reserves provide a margin of safety, although Strategy has already sold some of its bitcoin to pay preferred dividends. At the same time, American spot Bitcoin ETFs maintain a central place. They have attracted about $57 billion in cumulative net inflows and hold nearly $106 billion in assets, according to Butterfill. Unlike preferred stocks, ETFs can grow their holdings without imposing an ongoing dividend payment commitment on the funds.
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