Strategy, Strive Weigh Bitcoin Buys Against Preferred Dividends

Perpetual preferred stock has quietly financed purchases of 135,979 bitcoin since 2025, according to a Fidelity Digital Assets report cited by CoinDesk, but the funding channel now carries a growing dividend bill that could force Strategy (MSTR) and Strive (ASST) to slow their accumulation. The disclosure lands as bitcoin trades under renewed pressure, having slid below $80,000 over the weekend amid U.S. Middle East evacuations, per a separate CoinDesk report.

Market Intelligence

Fidelity research analyst Zack Wainwright wrote in a Tuesday report that preferred shares, which Fidelity estimates at roughly a $12 billion market, have funded more than 0.5% of bitcoin's maximum supply since Strategy's first offering, STRK, debuted in February 2025. Strategy now runs five separate preferred classes and remains the dominant issuer, making it what CoinDesk's sourcing calls a bellwether for the model's durability.

Mark Palmer, senior equity research analyst at StoneX, said perpetual preferreds have brought bitcoin to income investors that ETFs never reached. Bitwise head of research Ryan Rasmussen agrees the structure attracts buyers who might avoid bitcoin ETFs outright, though he still expects ETFs to remain the larger demand channel over time, with preferreds acting as "a second tailwind addressing a different type of investor." James Butterfill, CoinShares' head of research, noted that STRC alone, paying a variable dividend currently around 12%, raised $7.5 billion during 2026 through late July.

That funding isn't risk-free. Two Prime founder and CEO Alex Blume pointed to STRC briefly falling into the $70 range in late June as evidence of volatility tied to management competence and capital-market conditions, not just bitcoin's price. Strategy's latest weekly update, per Butterfill, showed $193 million spent repurchasing STRC against just 267 bitcoin purchased, while the company lifted its preferred-stock buyback authorization to $3 billion.

Analysis: What This Means

Palmer described the demand for perpetual preferreds as reflexive: continued preferred-funded bitcoin buying depends on the securities trading at or near par. Below par, Butterfill said, fresh issuance becomes less attractive and companies may favor buybacks over new purchases, competing directly for the same capital. Strategy's current preferred stock trades around $99.40. U.S. spot bitcoin ETFs have still attracted roughly $57 billion in cumulative net inflows and hold about $106 billion in assets, according to Butterfill, underscoring that ETFs remain the larger structural demand base even as preferreds grow as a secondary channel. For broader portfolio context on how these instruments compare to direct ownership, see WealthWatchPro macro market analysis.

Background and Context

Preferred shares sit between debt and common equity, paying regular dividends without voting rights or fixed maturity, which reduces refinancing pressure for issuers like Strategy and Strive compared to convertible debt. Fidelity notes the bitcoin-linked preferred market of roughly $12 billion is tiny against the $150 trillion global fixed-income market, suggesting room for growth if the structure holds up through a down cycle. Investors tracking these corporate treasury strategies for tax purposes should also maintain thorough records; for guidance, see our guide on Crypto Record Keeping for Australian Tax — What the ATO Requires.

What to Watch

Watch whether Strategy's preferred classes hold near par after bitcoin's weekend drop below $80,000; sustained trading below par, per Butterfill's framing, would likely push management toward buybacks over new bitcoin purchases. Also watch Strive's SATA pricing and any shift in Strategy's weekly purchase cadence, given it bought just 267 bitcoin in its most recent update against a $193 million STRC repurchase. The Fear & Greed Index sits at a neutral 54, suggesting sentiment hasn't yet cracked despite the price pullback.

Closing Thoughts

The preferred-stock mechanism that helped Strategy and Strive accumulate nearly 136,000 bitcoin now faces its first real test as prices soften and dividend obligations compound. Butterfill's view that preferreds "amplify the cycle," supporting purchases in favorable financing conditions and weakening as sentiment deteriorates, will be measured in real time over coming weeks as investors watch whether Strategy's $3 billion buyback authorization gets deployed faster than fresh bitcoin purchases.