Strategy Uses Preferred Stock to Fund $2.54 Billion Bitcoin Purchase

Strategy overtook BlackRock to become the world’s largest institutional holder of bitcoin last week. The milestone followed a purchase of $2.54 billion worth of bitcoin between April 13 and April 19, according to a Securities and Exchange Commission filing.

The acquisition was Strategy’s largest since November 2024 and brought its total holdings to 815,061 BTC, or about 3.88 percent of bitcoin’s 21 million supply. The bitcoin is currently valued at around $65 billion. Strategy financed the latest purchases mainly through issuance of perpetual preferred stock under the symbol STRC rather than through common shares or convertible debt.

From 2020 through 2024, Strategy had financed bitcoin acquisitions largely by selling convertible notes and issuing common stock. The stock at times traded at two to three times the value of the bitcoin on its balance sheet. That approach faced pressure when bitcoin prices fell in early 2025.

Convertible buyers sought more downside protection while common shareholders experienced dilution as the premium over bitcoin holdings diminished. Strategy responded by introducing preferred-stock offerings packaged as digital credit that emphasize steady income.

The flagship STRC preferred stock launched in July 2025 at $90 per share with a 9 percent coupon. It was designed to trade around a $100 par value while paying a monthly dividend. The structure allows Strategy to increase the dividend if the price falls too far below par or to issue additional shares through an at-the-market program if it rises above par.

STRC currently yields 11.5 percent and trades at $99.59. It has fallen below $95 only three times in the past nine months. Its market capitalization has grown to $8.5 billion since a $2.5 billion initial offering, making it the world’s largest preferred equity by that measure.

Trading volume in STRC has reached levels far above those of preferred shares issued by major banks. On April 13, more than $1.1 billion of STRC changed hands. That compares with average daily volumes for preferred issues from JPMorgan and Wells Fargo that rarely exceed $20 million.

Strategy issued nearly 33 million new STRC preferred shares between April 1 and April 19, raising close to $3.3 billion, according to SEC filings. In the same period it issued more than 2.7 million common shares for an additional $438 million. The company uses proceeds from these issuances in part to pay approximately $85 million in monthly dividends to STRC holders.

President and CEO Phong Le described the instrument on the Coin Stories podcast. “It’s a very simple instrument. Think about it as how you might get paid on a money market,” Le said. ” The preferred shares have no maturity date, carry no voting rights, and are subordinated to $8.3 billion in existing debt in the event of bankruptcy.

They also have no direct claim on the bitcoin holdings that Strategy continues to accumulate with the proceeds. ” The preferred stock forms a key part of Strategy’s “42/42” plan to raise $84 billion for additional bitcoin purchases through 2027. The company also tracks a metric it calls BTC Yield, currently reported at 9.5 percent, which measures bitcoin per diluted share.

Strategy maintains $8.2 billion of convertible debt outstanding.