Strategy, Strive face balancing act between bitcoin buying and preferred stock dividends
Corporate bitcoin holders like Strategy are increasingly using perpetual preferred stock to fund large-scale cryptocurrency purchases. This strategy allows companies to attract yield-focused investors while avoiding the refinancing pressures associated with traditional debt.
Why it matters
This financial model creates a new bridge between traditional income-seeking investors and the volatile cryptocurrency market, potentially increasing institutional demand for bitcoin.
On the one hand, they need cash to fund their purchases. On the other, they need to maintain investor appetite for new sales of the perpetual preferred stock that is their favored fundraising vehicle. As the number of shares in circulation grows, so do the dividend payments.
The securities, which sit between debt and common equity in the capital structure with regular payouts and no voting rights, have financed purchases of some 136,000 bitcoin in the 20 months since their introduction, Fidelity research analyst Zack Wainwright wrote in a Tuesday report . That’s more than 0.5% of the cryptocurrency’s maximum supply.
Strategy, the largest corporate bitcoin holder, is the dominant company in the market. Its preferred shares — it has five different classes — make it a bellwether for the model’s durability. Its first offering, STRK, debuted in February 2025.
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