K33 calculated that the additional dividend costs of the STRC preferred shares Strategy used to buy Bitcoin could erase the Bitcoin accumulation advantage over an alternative financing scenario in about seven months.
According to an analysis reported by The Block, research and brokerage firm K33 examined how Strategy financed its Bitcoin purchases. Head of Research Vetle Lunde built a hypothetical model in which the company relied far less on STRC preferred shares and questioned the efficiency of that approach.
A 4,947 BTC difference against billions of dollars in financing
Strategy’s actual holdings on October 12 were 848,250 BTC. In K33’s alternative scenario, the company was calculated to hold 843,303 BTC. The difference was 4,947 BTC.
The model excludes approximately $7.5 billion raised through STRC in the first half of 2026. Instead, it assumes that the $4 billion the company allocated to its dollar reserve from May to August and the $1.6 billion it spent on STRC buybacks were directed toward Bitcoin purchases.
The calculation assumes that 90% of STRC dividends were avoided and that the savings were also used to buy Bitcoin. While MSTR common stock issuance is held constant, weekly average Bitcoin prices are used for the purchases. Thus, the comparison is based on a model built on these assumptions, not on a second portfolio that actually existed.
$725 million in additional annual costs
Preferred shares provided Strategy with funds to buy Bitcoin without issuing more MSTR shares and helped it acquire approximately 100,000 BTC in the first half of the year. However, this financing also increased its regular dividend obligations.
K33 calculated that the company’s annual preferred stock dividend burden had risen from approximately $830 million at the beginning of the year to $1.56 billion. It attributed $725 million of the increase to the expansion of STRC.
At a Bitcoin price of $83,000, this additional annual cost is equivalent to approximately 8,740 BTC. According to Lunde, if the cost remains at this level, it could equal the 4,947 BTC accumulation advantage in the model in about seven months. Based on this calculation, the analyst judged the preferred stock model to be a mistake.
Is selling Bitcoin inevitable?
The company’s dollar reserve provides an important buffer against its payment obligations. K33 estimates that the reserve could cover approximately 42 months of dividends, thereby reducing the likelihood of Bitcoin sales.
Lunde’s criticism also extends to the cost of holding cash: He questions the spread based on the assumption that the reserve earns 4% while the STRC coupon is 12%. K33 believes issuing common stock could be more efficient for future Bitcoin purchases.
In September, Strategy also proposed switching to daily dividend payments for STRC and three other preferred shares. According to the company, this change, which requires shareholder approval, is not expected to increase its regular dividend obligations.
Not investment advice.