TLDR:
- Strategy requires only 1.5% annual Bitcoin appreciation to sustain $888 million dividend obligations
- The company maintains a $2.25 billion cash reserve, providing 30 months of dividend coverage independently
- Strategy holds 713,502 Bitcoin, representing 3.4% of total supply at $76,052 average purchase price
- The firm operates with 13% leverage versus 23% for investment-grade companies, with 42 basis point debt
Michael Saylor unveiled a dividend sustainability model that requires Bitcoin to appreciate just 1.25% annually for perpetual payments.
The Strategy Inc. Executive Chairman made this revelation during the company’s Q4 2025 earnings call on February 6, 2026.
The announcement came as Bitcoin plunged to $63,596.56, marking a 13% single-day decline. Strategy reported a $12.4 billion net loss, yet Saylor defended the treasury strategy with confidence.
Minimal Bitcoin Growth Sustains Perpetual Dividend Model
Saylor’s dividend framework centers on an exceptionally low appreciation threshold for long-term sustainability. CEO Phong Le explained that the company needs Bitcoin to increase by only 1.5% annually to maintain payments indefinitely.
The model functions by selling incremental Bitcoin holdings to cover dividend obligations while preserving the core treasury position.
Strategy holds approximately $45 billion in Bitcoin reserves against annual dividend commitments of $888 million across preferred equity instruments.
This ratio provides 67 years of dividend coverage based solely on current holdings without any price appreciation. The mathematical simplicity of the model demonstrates the company’s confidence in Bitcoin’s long-term value trajectory.
Saylor extended the scenario even further during the earnings call, addressing the possibility of zero Bitcoin appreciation.
He stated that even if Bitcoin stopped appreciating entirely, Strategy would have “80 years to figure out what to do about that.”
This timeline provides substantial flexibility for strategic pivots while maintaining current dividend commitments to shareholders.
Cash Reserves and Financial Buffers Strengthen Payment Certainty
Strategy established a $2.25 billion USD cash reserve in Q4 2025 specifically to address dividend reliability concerns.
CFO Andrew Kang noted this reserve provides 30 months of coverage without requiring any Bitcoin sales. The cash buffer insulates dividend payments from short-term Bitcoin price volatility and market downturns.
Michael Saylor’s post on X highlighted the multi-layered approach to dividend security that Strategy has implemented.
The company designed this structure to weather extended bear markets while maintaining shareholder distributions. The combination of cash reserves and Bitcoin holdings creates redundant payment mechanisms across different time horizons.
The dividend adjustment framework recently shifted to monthly volume-weighted average price calculations instead of five-day periods.
This change addresses trading patterns around record dates and payment dates. Strategy’s Stretch digital credit product trades near its $100 stated amount with an 11.25% annualized dividend rate.
Bitcoin Holdings Position Company for Long-Term Execution
Strategy held 713,502 Bitcoin as of February 1, 2026, with total acquisition costs reaching $54.26 billion. The average purchase price stands at $76,052 per coin, representing roughly 3.4% of Bitcoin’s total supply.
The company maintains its position as the world’s largest corporate Bitcoin holder despite recent price declines.
The company achieved a 22.8% BTC yield for 2025, exceeding the lower end of its target range. This metric measures the percentage increase in Bitcoin per share, demonstrating acquisition rates faster than shareholder dilution. The strategy’s accumulation strategy continues regardless of short-term price movements or accounting losses.
The Q4 2025 net loss of $12.6 billion stemmed primarily from mark-to-market accounting on Bitcoin holdings. Operating losses reached $17.4 billion, while earnings per share came in at negative $42.93 versus forecasts of positive $2.97. However, the software business generated $123 million in revenue, exceeding expectations by 3.53%.
Market Volatility Tests Dividend Thesis Amid Capital Raising Success
Strategy’s stock closed at $119.74 in aftermarket trading, down 17.12% following the earnings announcement on February 6, 2026.
Bitcoin’s simultaneous decline to $63,596.56 intensified selling pressure across cryptocurrency-related equities. The company’s Bitcoin holdings fell below their cumulative cost basis for the first time since 2023.
Saylor appeared undaunted during the conference call, emphasizing that the company’s Bitcoin treasury strategy was built to withstand volatility.
He noted that Bitcoin’s 45% drawdown from its all-time high four months earlier was consistent with the asset’s 45% volatility profile. This perspective frames current losses as expected fluctuations rather than fundamental flaws.
Strategy raised $25.3 billion in capital during 2025, becoming the largest U.S. equity issuer for two consecutive years. The company raised an additional $3.9 billion in January 2026 and acquired 41,002 Bitcoin during challenging conditions.
Strategy operates with 13% leverage compared to 23% for investment-grade companies, with convertible debt carrying a 42 basis point average interest rate.
