In Strategy’s latest weekly update, its report of a $193 million preferred stock buyback alongside the purchase of 267 Bitcoin highlighted the company’s choice between accumulating more BTC and reducing future dividend costs.
An analysis by CoinDesk, based on research from Fidelity Digital Assets and views from industry analysts, focuses on the balance in the financing model used by Bitcoin treasury companies such as Strategy and Strive. The companies raise funds for Bitcoin purchases by selling preferred shares that pay regular dividends; as the number of shares outstanding grows, so does the dollar amount of their payment obligations.
Shares that fund Bitcoin purchases also create costs
According to Fidelity research analyst Zack Wainwright, these financing instruments supported purchases of approximately 136,000 Bitcoin in the 20 months since they were introduced. That amount represents more than 0.5% of Bitcoin’s maximum supply. Fidelity estimates the size of the Bitcoin-focused preferred stock market at approximately $12 billion.
These products sit between debt and common stock in the capital structure and offer regular dividends instead of voting rights. Their lack of fixed maturities reduces pressure on companies to refinance debt, while allowing them to reach investors seeking regular income who do not want to buy Bitcoin directly.
According to James Butterfill, head of research at CoinShares, Strategy’s variable-dividend STRC shares raised $7.5 billion in 2026 through the end of July. The dividend rate cited in the article is around 12%.
What is behind the $193 million buyback?
Butterfill says Strategy reported a $193 million STRC buyback and a purchase of 267 BTC in its latest weekly update. The company’s authorization for preferred stock buybacks was also increased to $3 billion.
Shares bought back can reduce future dividend payments. But since the same money could be used to buy Bitcoin today, the two options compete for the company’s capital. Butterfill also says Strategy previously sold some Bitcoin to fund its preferred stock dividends.
According to StoneX analyst Mark Palmer, the model can support new purchases only if the shares trade at or near par value. When the price falls below par, issuing new shares becomes less attractive, and buybacks may take priority.
If financing conditions deteriorate, Bitcoin demand may also weaken
Two Prime CEO Alex Blume cites STRC’s brief decline into the $70 range at the end of June as an example of volatility. The price of these shares is influenced not only by Bitcoin but also by company management, obligations, and conditions in the capital markets.
Bitwise head of research Ryan Rasmussen says preferred shares attract a different investor base but expects Bitcoin ETFs to become a larger source of demand over the long term. According to data shared by Butterfill, total net inflows into U.S. spot Bitcoin ETFs are approximately $57 billion, while assets under management are approximately $106 billion.
Net inflows into ETFs increase the funds’ Bitcoin holdings, while company management decides how to use money raised from preferred stock sales. According to Butterfill, this model supports purchases when financing conditions are favorable, but its contribution can decline when investor confidence weakens.
Not investment advice.