Strategy (formerly MicroStrategy), the world’s largest Digital Asset Treasury (DAT) company, plans to never sell any of its bitcoin (BTC). However, to accomplish that feat, there are substantial annual costs to service its holdings: currently $689 million and rapidly increasing.
Broadly speaking, the company, which holds $66 billion worth of BTC, has cash obligations to service its treasury in the form of coupons to debtholders, dividends to preferred shareholders, and other expenses related to running its business such as operating expenses.
It also has cash obligations such as product support and subscriptions, as well as possible future obligations such as taxes.
Strategy mostly intends to avoid incurring tax obligations in order to preserve return of capital (ROC) dividend tax status for its preferred shareholders.
Specifically, per annualized figures as of October 24, 2025, the company has $689 million worth of annual dividend and debt interest expenses. Those obligations, however, are constantly increasing and, according to the company’s own forecast, will become billions of dollars in future years.
Going forward, founder Michael Saylor has set aggressive BTC Yield targets for 2025 and future years. Most of these acquisitions will add dividend obligations.
Strategy’s rapidly rising costs of not selling BTC
To accomplish a positive BTC Yield, Strategy must accrete additional BTC per MSTR share, i.e. on a dilution-adjusted basis.
Year-to-date, as of October 24, the company had accreted a positive BTC Yield of 26.1% and hopes to achieve 30% by December 31.
Forecasting years of accumulation into the future, the company’s annual BTC Yield target remains in the double-digits.
To buy most of its BTC, Strategy plans to sell preferred shares like STRK, STRF, STRD, STRC, or STRE that don’t immediately dilute MSTR.
Assuming the company raises the same mix of capital in 2026 as it did in 2025 from at-the-market (ATM) offerings of MSTR and its 8-10.5% dividend-yielding preferred shares, it will buy billions of dollars worth of additional BTC and add tens if not hundreds of millions of additional dollars atop its dividend obligations.
These dividends, in turn, require additional capital. Unfortunately, Strategy doesn’t make much money as a traditional business.
Read more: Strategy earnings puts tiny STRC front and center
Not enough of a traditional business
Specifically, from January 1, 2025 through October 24, Strategy reported operating Income of $12 billion, but most of that was the unrealized appreciation of its BTC holdings.
In contrast, it reported less than $355 million in total revenues for the first nine months of 2025.
Therefore, Strategy’s ability to service its treasury without selling BTC mostly depends on its ability to sell additional equities (common and preferred stock).
It could also sell debt like corporate bonds instead of equity, although it provided guidance on its Q3 earnings call that it doesn’t intend to sell additional debt.
In fact, it intends to equitize its existing debt sometime soon.
Obviously, and as Saylor himself acknowledged on his Q3 earnings presentation, selling non-dividend yielding commons — or preferreds that only pay dividends when the company’s board of directors manually approves payouts — are preferable to bonds that require on-time coupon payments plus principal repayment at maturity.
Selling equity, in turn, relies on an investor’s optimism in management’s ability to accrete BTC per share on a dilution-adjusted basis.
The top metric for tracking this optimism is the multiple-to-Net Asset Value (mNAV) of MSTR, the company’s most widely-followed valuation metric and an acronym that its own shareholder community coined.
Read more: Strategy hasn’t sold any STRC through ATM since July
The metric that matters: mNAV
In essence, mNAV is the premium that shareholders pay to own MSTR versus BTC itself.
Because many investors are optimistic that Strategy can use its large treasury to sell non-dilutive credit products and accrete additional BTC per MSTR share, they pay extra for MSTR versus the company’s BTC.
Specifically, they pay 7% more (or 1.07x mNAV) per basic MSTR share outstanding above Strategy’s BTC holdings, equivalent to 30% (or 1.3x mNAV) more than its BTC holdings after accounting for its total enterprise value of Strategy’s bonds, equities, and convertibles.
Incredibly, they pay this mNAV premium for MSTR despite having no legal claim over Strategy’s BTC holdings.
Moreover, they calculate it with no regard to the company’s debt, dividends, encumbrances, or future obligations. They simply trust that Saylor and the management team will honor their commitments.
Lawyers for the company have disclosed that ownership of MSTR stock does not confer any “ownership interest in the BTC the company holds.”
In summary, the costs of not selling BTC are rising at Strategy. The company has purchased BTC in every quarter since Q3 2020, and it plans to continue buying it forever.
Those acquisitions, however, add dividend obligations that are already nearly $700 million per year and will soon rise into the billions.
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Source: https://protos.com/strategy-needs-to-pay-689m-a-year-to-not-sell-bitcoin/
