Strategy, Strive: preferred dividends now compete with BTC buys

Perpetual preferred shares have become the main engine behind corporate bitcoin buying: since early 2025 they have financed purchases of 135,979 BTC through Oct. 5, more than 0.5% of bitcoin's maximum supply, according to a Fidelity Digital Assets report cited by CoinDesk. The engine has a cost, though, and it grows with every share sold.

How the machine works

Strategy and Strive sell preferred stock with regular dividends, no voting rights and no maturity date, then use the cash to buy bitcoin. Fidelity sizes this bitcoin-linked preferred market at about $12 billion. It reaches a buyer ETFs never did: income investors. CoinShares' James Butterfill says Strategy's STRC, with a variable dividend of around 12%, raised $7.5 billion in 2026 through late July alone.

Our take: it only works near par

The model is reflexive. New issuance makes sense while the preferreds trade at or near their $100 par value; below par, selling more becomes expensive and companies lean toward buying shares back instead. That is already visible: Strategy's latest weekly update showed $193 million spent repurchasing STRC against just 267 bitcoin bought, and its preferred buyback authorisation has risen to $3 billion. STRC briefly fell into the $70s in late June; it now trades around $99.40.

Every new share also adds a dollar dividend that must be paid whatever bitcoin does. Strategy has already sold some bitcoin to cover preferred dividends, Butterfill notes, and it is moving STRC to daily dividends from November.

So preferreds amplify the cycle rather than smooth it: they fund buying when conditions are good and fade when sentiment sours. Spot ETFs — about $57 billion of cumulative net inflows and roughly $106 billion in assets — remain the bigger, simpler demand channel, and Bitwise's Ryan Rasmussen expects that to stay true. Weekend moves like today's dip below $80,000 are exactly the stress test for how "reflexive" this funding really is.