Strategy and Strive fund bitcoin purchases by selling perpetual preferred stock, but the dividends on those shares compete for the same cash. Fidelity says the securities have financed purchases of some 136,000 bitcoin, while repurchases and payouts could constrain further buying.
Bitcoin treasury companies Strategy (MSTR) and Strive (ASST) face a tough balancing act, according to Fidelity Digital Assets and analysts who spoke to CoinDesk. They need cash to buy bitcoin, but they also need to keep investor appetite for new sales of the perpetual preferred stock they use to raise it. As the number of shares in circulation grows, so do the dividend payments.
Preferreds bring yield investors to bitcoin
Fidelity research analyst Zack Wainwright wrote that the securities financed purchases of some 136,000 bitcoin in the 20 months since their introduction. Fidelity also puts the bitcoin-focused preferred market at roughly $12 billion.
The shares pay dividends without a fixed maturity, which reduces refinancing pressure and attracts investors reluctant to own bitcoin directly. Mark Palmer, a senior equity research analyst at StoneX, said: "Perpetual preferreds have brought bitcoin to income investors, a group that ETFs never reached."
Bitwise's Ryan Rasmussen also sees the products drawing buyers who might avoid bitcoin exchange-traded funds. However, he expects ETFs to remain the bigger demand channel.
Buybacks compete with purchases
CoinShares' James Butterfill said STRC, which pays a variable dividend currently around 12%, raised $7.5 billion during 2026 through late July. That funding carries a recurring dividend cost.
Continued preferred-funded buying depends on the securities trading at or near par, Palmer said. Below par, fresh issuance becomes less attractive, and companies may favor repurchases, Butterfill said.
Strategy's latest weekly update reported $193 million spent repurchasing STRC alongside purchases of just 267 bitcoin, according to Butterfill. The firm also increased its preferred-stock repurchase authorization to $3 billion, he said. Butterfill added that Strategy has already sold some bitcoin to fund preferred dividends.
ETFs remain the larger channel
Butterfill said U.S. spot bitcoin ETFs have attracted approximately $57 billion in cumulative net inflows and hold around $106 billion in assets. Redemptions can reverse ETF demand but leave no continuing dividend commitment, he said.
In his view, preferreds amplify the cycle, supporting purchases when financing conditions are favorable and weakening as sentiment deteriorates.
Source: CoinDesk
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