TheBlock
Strategy held 848,250 BTC on Oct. 12, but K33 estimates it would have held 843,303 BTC if it had largely avoided using STRC preferred stock to finance purchases this year. The hypothetical removes about $7.5 billion raised through STRC in the first half of 2026 and assumes some reserve funds, buybacks and avoided dividends went toward Bitcoin instead. K33 used weekly average BTC prices and left MSTR issuance unchanged.
Why it matters
The preferred shares let Strategy fund Bitcoin purchases without issuing more MSTR common stock, but they add ongoing dividend obligations. K33 put annual preferred dividends at $1.56 billion, up from about $830 million earlier this year, with STRC expansion accounting for $725 million of the increase. At $83,000 per BTC, K33 calculated that the additional annual cost equates to roughly 8,740 BTC.
K33 Head of Research Vetle Lunde argued the financing choice was a mistake and said common stock issuance would be more efficient for future Bitcoin purchases. His comparison is a counterfactual, not a claim that Strategy would necessarily have bought the same amount of BTC under different financing terms.
Market impact
K33 estimates the added annual dividend cost could erase the 4,947 BTC gap between Strategy's actual holdings and its hypothetical balance in about seven months. The company's dollar reserve offers a buffer: K33 estimates it could cover roughly 42 months of dividends, reducing the likelihood of a Bitcoin sale to meet payments.
That reserve also has a carrying cost in K33's analysis. The firm compared an assumed 4% return on cash with STRC's 12% coupon. Strategy has recently bought back STRC shares, which closed at $99.90 on Oct. 13, just below their $100 par value. A proposal to move STRC and three other preferred stocks to daily dividends still needs shareholder approval; Strategy said it would not increase regular dividend obligations. BTC traded down 0.3% on Wednesday at $82,863.
Frequently asked questions
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How many more BTC does K33 estimate Strategy might have held?
K33's hypothetical balance is 843,303 BTC, compared with Strategy's actual 848,250 BTC on Oct. 12. The difference is 4,947 BTC in the opposite direction: the hypothetical balance is lower.
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What costs did K33 include in its preferred-stock analysis?
K33 removed about $7.5 billion raised through STRC in the first half of 2026 and assumed some reserve funds, buybacks and avoided dividends would instead have funded Bitcoin purchases.
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How large are Strategy's annual preferred dividend obligations?
K33 estimates annual obligations at $1.56 billion, up from about $830 million earlier in the year. It attributes $725 million of the increase to STRC's expansion.
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How long could Strategy's dollar reserve cover preferred dividends?
K33 estimates the reserve could cover roughly 42 months of dividend payments, reducing the likelihood that Strategy would need to sell Bitcoin to meet them.
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What does Strategy's proposed daily dividend change require?
The proposal covers STRC and three other preferred stocks and still requires shareholder approval. Strategy has said the change would not increase its regular dividend obligations.
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