CoinDesk
Perpetual preferred stocks have financed purchases of roughly 136,000 bitcoin in the 20 months since their introduction, according to Fidelity research analyst Zack Wainwright, a sum equal to more than 0.5% of Bitcoin's maximum supply. Fidelity pegs the bitcoin-focused preferred market at about $12 billion, a rounding error next to the $150 trillion global fixed-income market.
But the model now faces a squeeze. Strategy, the largest corporate bitcoin holder with five preferred share classes, spent $193 million repurchasing STRC in its latest weekly update while buying just 267 BTC, per CoinShares' James Butterfill, and lifted its preferred buyback authorization to $3 billion. The firm has already sold some bitcoin to fund preferred dividends. STRC, which pays a variable dividend around 12%, raised $7.5 billion through late July 2026 and briefly slid into the $70 range in late June before recovering to about $99.40.
Why it matters
Perpetual preferreds sit between debt and common equity, paying regular dividends with no fixed maturity. They have opened bitcoin exposure to income investors, a demographic spot ETFs never captured. "Perpetual preferreds have brought bitcoin to income investors, a group that ETFs never reached," said Mark Palmer, senior equity research analyst at StoneX. Bitwise's Ryan Rasmussen still expects ETFs to remain the larger demand channel, with preferreds acting as a second tailwind aimed at yield buyers.
The catch, analysts say, is reflexivity. Continued preferred-funded buying depends on the securities trading at or near par. Below par, fresh issuance loses appeal and repurchases take priority.
Market impact
"Buybacks can reduce future dividend costs, but they compete with bitcoin purchases for capital today," Butterfill said. Growing issuance creates tension between increasing bitcoin per common share, meeting dollar-denominated dividend commitments and avoiding forced BTC sales, according to Two Prime CEO Alex Blume.
For context, US spot bitcoin ETFs hold around $106 billion in assets on roughly $57 billion of cumulative net inflows.
Frequently asked questions
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How much bitcoin have perpetual preferred stocks financed?
Perpetual preferred stock has financed purchases of about 136,000 BTC in the 20 months since the securities debuted in February 2025, according to Fidelity. That equals more than 0.5% of Bitcoin's maximum supply.
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Why are Strategy's bitcoin purchases slowing down?
Strategy spent $193 million repurchasing STRC preferred shares in its latest weekly update while buying just 267 BTC, per CoinShares. Buybacks reduce future dividend costs but compete with bitcoin purchases for capital today.
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What dividend does Strategy's STRC preferred stock pay?
STRC pays a variable dividend currently around 12%, and raised $7.5 billion through late July 2026. The stock briefly fell into the $70 range in late June before recovering to trade near $99.40.
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How big is the bitcoin preferred stock market compared to ETFs?
Fidelity puts the bitcoin-focused preferred market at roughly $12 billion. US spot bitcoin ETFs hold around $106 billion in assets on approximately $57 billion of cumulative net inflows, and Bitwise expects ETFs to remain the larger demand channel.
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When do preferred-funded bitcoin purchases become unsustainable?
Analysts say the model is reflexive: it works while preferred shares trade at or near par, keeping fresh issuance attractive. Below par, issuance dries up, companies favor buybacks, and dividend obligations may force bitcoin sales, as Strategy has already done to fund payouts.
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