Strategy’s preferred stock funding may risk bitcoin holdings, K33 suggests

The analytics firm calculates that STRC has added $725 million to Strategy’s yearly dividend expenses, even while assisting the firm in securing close to 100,000 BTC earlier this year.

Strategy Strategy, Inc. (MSTR) would have possessed 843,303 BTC as of October 12 if it had largely refrained from utilizing its STRC preferred stock to fund cryptocurrency acquisitions throughout the year, according to data from research and brokerage organization K33. The enterprise actually held 848,250 BTC at that point in time.

Within a fresh report, K33 Research Director Vetle Lunde computed the alternate portfolio figures by stripping away the roughly $7.5 billion that Strategy accumulated via STRC during the initial half of 2026. He next presumed that the $4 billion Strategy set aside for its fiat reserve between May and August along with $1.6 billion in STRC repurchases had instead been allocated toward acquiring bitcoin. K33 similarly presumed that Strategy would have bypassed 90% of its STRC dividend disbursements and instead invested the variance into bitcoin. This computation left MSTR share creation untouched and relied on weekly mean bitcoin valuations.

While the preferred equities enabled Strategy to gather capital for bitcoin acquisitions without diluting its pool through extra MSTR shares, they likewise introduced ongoing dividend commitments that Strategy remains obligated to fulfill. Even though those preferred securities assisted Strategy in securing nearly 100,000 BTC during the first six months of the year, Lunde challenged the underlying financial strategy. “Was the pref model a mistake? We believe the answer to that question is yes,” he stated.

The cost of Strategy’s preferred shares

K33 pegged Strategy’s annual preferred payout requirements at $1.56 billion, climbing from approximately $830 million earlier in the year, determining that the expansion of STRC accounted for $725 million of that growth.

At a valuation of $83,000 per bitcoin, Lunde equated the extra yearly dividend expenses to roughly 8,740 BTC. He estimated that those expenditures would prove sufficient to wipe out the 4,947 BTC gap separating Strategy’s actual treasury from K33’s projected balance within approximately seven months.

Strategy’s cash reserve offers a degree of shielding against these obligations. K33 calculated that it could sustain roughly 42 months of dividend payouts, lessening the probability that Strategy might be forced to liquidate bitcoin. Nevertheless, Lunde questioned the financial burden of maintaining that liquidity, contrasting a 4% yield on the cash reserve against a 12% coupon on STRC, and asserting that issuing common equity would represent a more optimal mechanism for financing upcoming bitcoin purchases.

Over recent weeks, Strategy has actively repurchased STRC shares, which concluded trading at $99.90 on October 13, sitting right underneath their $100 par value. The corporation proposed transitioning STRC and three additional preferred equities toward daily dividend payouts back in September. This adjustment still mandates shareholder authorization, and Strategy indicated it would not elevate its standard dividend commitments.

Bitcoin Bitcoin (BTC) retreated 0.3% on Wednesday, settling at $82,863 based on data from The Block’s pricing metrics.