In brief
- Strategy recently purchased around $60 million worth of Bitcoin.
- The acquisition was funded entirely with proceeds from preferred shares.
- Strategy had $8 million in leftover cash from its most recent raise.
Strategy, formerly MicroStrategy, unveiled its smallest Bitcoin purchase in a month on Monday, scooping up 525 Bitcoin worth $60 million, according to a press release.
The Tysons, Virginia-based firm now owns roughly 639,000 Bitcoin worth $73 billion. The company’s latest acquisition was funded entirely with proceeds from preferred shares.
The Bitcoin-buying firm often issues common shares to grow its stockpile, while taking advantage of the premium that its stock trades at relative to its Bitcoin holdings. In recent weeks, however, the company’s approach to funding has been varied.
Last month, Strategy announced back-to-back Bitcoin purchases that weren’t funded with proceeds from issuing common shares. Over the period, it bought 585 Bitcoin worth $67 million, with one week representing its lightest activity since late March.
Strategy, notably, did not go all-in on Bitcoin last week. Although the company raised around $68.2 million through its STRF, STRC, and STRD offerings, the company only spent $60.2 million on Bitcoin, leaving it with around $8 million in extra cash.
Strategy’s stock price fell 2% to $325 on Monday, according to Yahoo Finance. Bitcoin meanwhile changed hands around $115,000, a 0.4% decrease over the past day, according to crypto data provider CoinGecko.
In a Myriad market, more than 80% of respondents believe that Bitcoin will trade above $105,000 throughout September. BTC last dipped below that level in June, although it has been buffeted by macroeconomic uncertainties more recently.
(Disclosure: Myriad is a prediction market and engagement platform developed by Dastan, parent company of an editorially independent Decrypt.)
Last week, Strategy said on X that options were listed on the Nasdaq for its preferred shares. So far this year, the company has unveiled four distinct types. Some can be converted into common shares, while others require Strategy to make regular dividend payments.
The company has also modified its equity issuance policy recently. In August, the firm said it would only issue common shares when its stock traded at more than a 2.5x premium to its Bitcoin holdings. That guidance was modified again to allow Strategy to also issue shares under the framework “when otherwise deemed advantageous.”
Strategy’s stock was valued at a 1.26x premium to its Bitcoin holdings on Monday compared to a 1.39x premium a month ago, according to Bitcoin Treasuries. And Strategy’s stock hasn’t traded at a 2.5x premium to its Bitcoin holdings since November.
Some analysts believe that Strategy’s self-imposed restriction compressed that premium, but in a Monday note, Geoff Kendrick, global head of digital assets research at investment bank Standard Chartered pointed to another potential factor: copycats.
“We see market saturation as the main driver of recent [premium] compression,” he wrote, arguing that there are currently “too many imitators” in the Bitcoin treasury space.
A saturated market may not be all bad, Kendrick countered. If fledgling firms that own Bitcoin become distressed, he said consolidation is a “strong possibility,” with Strategy poised to be among the most active buyers.
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