Strategy breaks billion-dollar streak with 2,932 BTC acquisition for $264M

Strategy continued its streak of weekly purchases, though this time adding a smaller weekly purchase. For its latest report, Strategy added 2,932 BTC to its treasury. 

Strategy returned to a relatively smaller weekly BTC purchase, adding 2,932 BTC to its balance. The recent purchase follows two weeks of much larger additions, where Strategy made its highest weekly purchase in months. 

Strategy continued with its streak at an average price of $90,061 per BTC. To date, the company has acquired $54.19B of BTC. 

Strategy remains the main buyer among playbook companies, retaining the biggest share of total treasuries. 

The average price for Strategy also serves as a potential price floor for BTC at over $76,000 per coin. For now, Strategy still buys just above the market levels, keeping its average price relatively low. 

Strategy continues using MSTR

For this week’s purchase, Strategy returned to using MSTR, despite the common stock dilution. For the past week, $257M in proceeds came from the MSTR ATM facility. 

Although Strategy tries to slow down MSTR issuance, it has gone ahead of its schedule in using the common stock ATM. There is still demand for the common stock, as recently announced by one of Japan’s leading banks, Sumitomo Mitsui. The banking giant holds $96.6M in MSTR common stock. 

MSTR traded at $163.11, rebounding slightly in the past few days. The common stock moves with more volatility compared to BTC and bounced from recent lows in anticipation of this week’s purchase. The MSTR market also awaits the company’s earnings call on February 5. 

For MSTR, any BTC rally can cause an even larger price reaction, as the common stock historically amplifies BTC moves. Investors are currently pointing out that the ongoing new issuance is increasing dilution, not allowing MSTR to rally. At the current stage, critics claim that Strategy is hurting common stock buyers while managing to pay out dividends and yield to preferred stockholders. 

Strategy increases the importance of STRC

In this week’s purchase, Strategy raised $7M from its STRC preferred stock. In the past month, STRC was the most active of all preferred shares, reaching $103M in trading volume for the past week. 

Strategy’s goal is to issue and sell STRC if the price is in the $99-$100 range. The STRC sales and the ability to buy more BTC depend on the preferred stock demand. 

The biggest appeal of STRC is its 11.06% yield, which Strategy is so far solvent enough to repay. The goal is to keep STRC close to $100, allowing the company to raise more for BTC purchases.

However, the current hype for STRC does not guarantee that Strategy will be able to continue relying on the preferred stock. After two active weeks, STRC achieved a smaller share of the weekly structure and did not prevent another round of MSTR dilution. On the other hand, more STRC issues expand the dividend yield owed. 

SATA is also rising to the $100 par level and may become a part of the weekly purchase mix. Strategy’s next hope is to break the four-year BTC cycle by boosting prices through its preferred stocks. The market is closely watched for a slightly different playbook. For now, BTC also has a subdued reaction to Strategy’s purchases, which are still through OTC deals.

The smartest crypto minds already read our newsletter. Want in? Join them.