Strategy, the world’s largest holder of Bitcoin, bought more than 1,000 of the original cryptocurrency last week, worth more than $76 million. The purchase follows one from the week prior worth $1.6 billion, which the company funded primarily through its “Stretch” perpetual preferred shares.
One analyst says that the company will get back to buying more Bitcoin and do so through its sale of these “Stretch” perpetual preferred shares, known as STRC.
“While the cadence and size of Strategy’s Bitcoin purchases will likely remain uneven on a week-to-week basis, reflecting market conditions and opportunistic timing, we fully expect the company to aggressively lean into its Bitcoin acquisition strategy as demand for its STRC perpetual preferred stock increases,” said Mark Palmer, senior equity research analyst at The Benchmark Company.
Strategy, run by executive chairman Michael Saylor, is a digital asset treasury—a company whose sole purpose is to acquire and hold on to vast amounts of Bitcoin. It can make these purchases through sales of its “Stretch” perpetual preferred shares, a security that offers investors an 11% annual yield.
Its common shares, the sale of which can also fund the company’s purchase of Bitcoin, are often tied to the currency’s performance. Strategy’s shares have increased about 10% in the last month, and Bitcoin is up about 9% during that time to its current price of roughly $70,000, according to Binance. Cryptocurrencies have shown growth and resilience since the beginning of the war in Iran, while traditional stock indexes like the S&P 500 have struggled.
Palmer, the analyst at The Benchmark Company, expects Strategy to continue to pivot back to its sales of “Stretch”, “We expect STRC to become established as Strategy’s primary vehicle for fueling its Bitcoin purchases going forward.”
