Who Is Strategy? Background on the Company
Strategy, formerly known as MicroStrategy, rebranded in early 2025 to reflect its transformation into a Bitcoin-centric firm. Founded in 1989 as a business intelligence and software company, Strategy began its Bitcoin acquisition journey in 2020 under co-founder and executive chairman Michael Saylor.
Since then, it has evolved into the world’s largest publicly traded corporate holder of Bitcoin. As of July 2025, Strategy holds approximately 628,791 BTC—over 3% of Bitcoin’s circulating supply—valued at nearly $74 billion. The company uses a combination of treasury cash, equity raises, convertible debt, and most recently, preferred stock offerings to fund its BTC acquisitions.
The firm’s pivot has been deliberate: moving away from enterprise software and toward full alignment as a digital asset-holding vehicle. This makes Strategy a de facto Bitcoin spot ETF alternative, offering equity-style exposure to BTC with active capital structure management. Its common stock (STRY) and preferred share series (STRF, STRK, STRD, STRC) trade actively and are used strategically for treasury expansion.
Transaction Breakdown
On July 30, 2025, Strategy disclosed the purchase of 21,021 BTC for $2.46 billion in cash. The acquisition was funded entirely through proceeds from its newly issued Series C preferred stock (STRC), which raised a total of $2.47 billion via an At-The-Market (ATM) equity program.
Key features of the transaction include:
- Date of Purchase: July 29–30, 2025
- BTC Acquired: 21,021 BTC
- Total Cost: $2.46 billion (average price ≈ $117,000/BTC)
- Financing Source: Net proceeds from STRC preferred equity offering
- Preferred Share Yield: Initial 9% floating monthly rate, non-convertible
- Total BTC Holdings Post-Transaction: 628,791 BTC
STRC is designed as an institutional-friendly instrument with a floating dividend, aiming to trade close to par ($100) and reduce price volatility relative to previous preferred series.
Notably, this marks the first time Strategy has funded a BTC purchase purely through preferred equity, rather than issuing convertible debt or common shares.
Strategic Rationale & Institutional Signal
This transaction exemplifies Strategy’s maturing capital strategy and reinforces several strategic objectives:
Non-Dilutive Capital Formation
Unlike convertible debt or equity issuance, the STRC preferred offering allows Strategy to raise capital without diluting common shareholders or increasing share count. This structure appeals to investors who want BTC exposure without risking cap table expansion.
Permanent Bitcoin Reserve Expansion
Strategy’s core thesis is that Bitcoin is digital property. Each BTC acquired is removed from circulation permanently (or indefinitely) and added to long-term treasury. This purchase raises its total holdings to nearly 3% of all Bitcoin that will ever exist.
Institutional-Grade Infrastructure
By using structured preferred equity with fixed dividends and institutional custody solutions, Strategy is offering Wall Street a scalable, yield-bearing, Bitcoin-backed investment mechanism.
NAV Accretion & Leverage of Premiums
Strategy’s common stock has traded at a significant premium to its net asset value (NAV). By raising capital through preferred shares while the NAV is elevated, the firm effectively converts equity premiums into hard BTC reserves.
Board-Aligned Liquidity Strategy
The company has stated that preferred proceeds may be used not only for BTC purchases but also to fund dividends on previously issued preferreds, further stabilizing its capital stack.
Market Implications for Institutional Buyers
For institutional buyers, this transaction highlights several critical macro and micro trends:
Preferred Stock as Bitcoin Accumulation Infrastructure
Strategy’s STRC issuance validates preferred stock as a viable instrument for acquiring BTC at scale. Institutions should consider how structured yield instruments can be integrated into digital asset strategies.
BTC Treasury Models Enter Maturity Phase
This deal marks a new stage in Bitcoin treasury management. Strategy is no longer experimenting—it’s operating a repeatable model. This lowers perceived risk for imitators and opens doors for CFOs considering similar capital allocation shifts.
Indirect Exposure via Equity Premium Capture
Investors buying STRC are effectively purchasing yield backed by Bitcoin. Those holding STRY benefit from NAV accretion, while STRC holders gain income tied to BTC’s value without direct token ownership. This bifurcation is increasingly attractive to conservative allocators.
Supply Scarcity & Psychological Impact
Removing 21,000+ BTC from active supply tightens market liquidity. This creates upward price pressure, intensifies FOMO among late entrants, and signals long-term conviction to regulators and capital allocators alike.
Emergence of De Facto BTC Treasury ETFs
Strategy’s model offers many ETF-like features: transparency, regulated structure, NAV disclosures, and liquidity. Institutional allocators uncomfortable with spot ETFs may view Strategy as a hybrid vehicle bridging compliance and crypto exposure.
Risks & Considerations
While the strategic rationale is compelling, institutional buyers should also consider key risks and structural limitations:
Interest Rate Sensitivity
Floating-rate preferred shares like STRC are exposed to macro interest rate shifts. If market rates rise, Strategy’s dividend obligations increase, potentially compressing margins and reducing flexibility.
Bitcoin Volatility
BTC remains highly volatile. A sudden drawdown in BTC price could erode the market value of Strategy’s holdings and its equity premium, impacting both STRY and STRC valuation in secondary markets.
Regulatory Risk
Although Strategy is not structured as a fund, it functions like one. Future SEC interpretations or rule changes could force regulatory reclassification or additional disclosures, especially as BTC’s financialization deepens.
Execution Risk
Issuing billions in preferred equity, managing yield expectations, and converting cash into BTC all require high-level execution. Operational missteps could create mispricing or investor distrust.
Key Metrics & Data Snapshot
- Total BTC Holdings: 628,791 BTC
- Total Cost Basis: $30.5 billion (≈ $48,500 per BTC)
~$73.6 billion (at $117,000/BTC) - Funding Structure: STRY common shares + STRC, STRF, STRK, STRD preferreds
- Latest Acquisition: 21,021 BTC @ ~$117,000/BTC
- STRC Dividend: Floating (currently 9% APY)
What Institutional Buyers Should Watch Next
For institutional buyers considering entry or expansion into Bitcoin exposure, Strategy’s evolving playbook offers key signals:
Adoption of Preferred Share Funding by Other Corporates
If STRC proves to be stable and effective, other firms may emulate this structure—leading to an industry-standard vehicle for BTC treasury expansion without shareholder dilution.
Movement in BTC ETF Premiums vs. STRY
Tracking how Strategy’s NAV premium compares to Bitcoin ETFs like IBIT or FBTC can offer insight into institutional preferences for operational leverage versus passive exposure.
Macroeconomic Rate Impacts on Yield Instruments
Interest rates influence STRC pricing and market sentiment. Institutions should monitor Fed policy shifts and how those affect floating-rate preferred securities broadly.
Regulatory Developments Around Corporate BTC Holdings
New guidelines from the SEC or FASB around crypto asset disclosures, fair value treatment, and treasury usage will be pivotal in determining how scalable Strategy’s model really is.
Liquidity Behavior of STRY and STRC
Tracking volume, volatility, and pricing gaps in Strategy’s common and preferred shares offers insight into market reception, investor sentiment, and risk appetite across capital structures.
Final Thoughts
Strategy’s $2.46 billion acquisition of 21,021 BTC is a landmark moment in corporate Bitcoin accumulation. It showcases a repeatable capital market strategy that blends equity instruments with crypto reserve expansion, sending a strong signal to institutional buyers about how far BTC integration has come.
By innovating on capital structure through STRC preferred shares, Strategy provides a model that combines balance sheet efficiency, BTC scarcity, investor yield, and shareholder alignment. For institutions seeking long-duration crypto exposure without wallet custody, this structure may redefine what it means to be a Bitcoin proxy on Wall Street.
As capital flows increasingly into digital assets via traditional market rails, the Strategy playbook will be studied, replicated, and expanded. It marks the institutionalization of Bitcoin—not as a speculative trade, but as a strategic, balance sheet asset.
