TLDR
- Strategy funded most of its recent bitcoin purchases through STRC perpetual preferred share sales.
- K33 said the STRC structure depends on stable pricing and sustained market confidence.
- STRC offers a variable monthly dividend of about 11.5% annualized and trades near $100.
- K33 reported that STRC has recorded price declines of 5% to 10% during market pullbacks.
- Strategy holds about $2.25 billion in cash, which covers roughly 25 months of dividend payments.
Strategy accelerated its bitcoin purchases through heavy use of STRC perpetual preferred shares, K33 reported. The brokerage said the structure creates risks tied to market sentiment and pricing behavior. However, K33 stated that Strategy’s $2.25 billion cash reserve supports near-term dividend coverage.
STRC Structure Drives Bitcoin Accumulation
Strategy funded $1.18 billion of last week’s $1.57 billion bitcoin purchase through STRC sales. It raised the remaining $396 million from Class A common stock. The company disclosed these figures in its latest acquisition update.
STRC trades near $100 and offers a variable monthly dividend near 11.5% annualized. The instrument channels investor demand for yield into bitcoin purchases. However, K33 Head of Research Vetle Lunde said stability depends on price support and continued confidence.
Lunde wrote, “If STRC trades below its target level for a prolonged period, confidence could weaken.” He added that the product could shift toward a credit-like risk profile. STRC recorded several price drops between 5% and 10% during market pullbacks.
Sentiment Dependencies and Market Dynamics
K33 said the model relies on STRC holding near its $100 target price. It also depends on the strategy equity trading at a premium to net asset value. Both conditions reflect market sentiment and can change together.
Lunde stated that STRC holders receive capped upside through dividends. However, they face downside during broader market declines. He said the instrument introduces added complexity compared with direct spot bitcoin exposure.
Strategy holds roughly $2.25 billion in cash to cover dividend obligations. Lunde said this reserve covers about 25 months of payments. He added, “We do not view it as an immediate systemic risk to BTC due to MSTR’s strong cash cushion.”
Strategy added 40,331 BTC over two weeks, marking its fourth-largest such purchase period. It raised $2.85 billion during that span, with 55% sourced from STRC. Last week alone, the company bought 22,337 BTC.
Lunde said the mechanism can create a feedback loop in stronger markets. When STRC trades near its target, Strategy issues shares and buys bitcoin. The firm may also issue common equity to manage leverage and balance sheet optics.
Bitcoin rose about 13% since Feb. 27, according to K33 data. During the same period, the Nasdaq and S&P 500 declined, while gold recorded deeper losses. Lunde wrote that bitcoin had been “underowned, overshorted, and oversold” before the rebound.
K33 attributed the asset’s recent strength to prior positioning conditions. The report noted bitcoin had experienced a roughly 50% drawdown before recovering. The firm published these findings in its latest research update.
