Bitcoin: Dividends complicate financing purchases of Strategy and Strive

The bitcoin market also evolves according to the financing choices of companies that accumulate it. Strategy and Strive use preferred shares to attract investors seeking regular income. However, the dividends associated with these securities create recurring expenses that limit their purchasing capacity. Between cryptocurrency acquisitions, share buybacks, and cash reserves, these companies must now find a financial balance to continue their strategy without weakening their commitments.

Dividends weigh on Bitcoin purchases

Perpetual preferred shares open a new path for investors seeking income indirectly linked to bitcoin. Mark Palmer, analyst at StoneX, believes these products attract an audience that ETFs had not managed to reach. They notably allow yield-focused investors to access this asset class without relying solely on exchange-traded funds.

Ryan Rasmussen, head of research at Bitwise, shares this analysis. According to the CoinDesk report, he nonetheless considers that ETFs will remain the main source of demand in the long term. In his view, perpetual preferred shares could complement this channel by attracting investors with different goals. Their development will thus depend as much on their ability to distribute income as on market conditions.

James Butterfill, head of research at CoinShares, highlights the scale of capital mobilized by these instruments. Strategy’s STRC stock, which offers a variable dividend of around 12%, raised 7.5 billion dollars between 2026 and the end of July. These funds facilitate acquisitions, but they also entail regular payments. Companies must therefore preserve sufficient resources to finance their dividends while continuing their cryptocurrency purchases.

Strategy and Strive face a delicate financial balance

Strategy’s preferred shares and the products offered by Strive, notably SATA, do not only follow variations in bitcoin prices. Alex Blume, founder and CEO of Two Prime, explains that their value also depends on company management, their financial obligations, and capital market conditions. Investors must thus consider several factors before assessing these securities.

The temporary drop of STRC around 70 dollars at the end of June illustrates the risks linked to these instruments. Strategy’s preferred share currently trades around 99.40 dollars. For issuers, increasing offerings can raise the number of bitcoins held per common share. However, this policy also raises dividend-related obligations and complicates reserve management.

Management must therefore arbitrate among several financial objectives. It seeks to strengthen its bitcoin holdings, meet its commitments to preferred shareholders, and avoid selling its digital assets. These constraints become stronger when financing conditions deteriorate. In this context, the strength of cash reserves plays an important role in maintaining payments without excessively reducing acquisitions.

Share buybacks compete with acquisitions

Mark Palmer points out that demand for perpetual preferred shares leads to regular financial obligations. However, the ability to finance new purchases also depends on the price at which companies can issue these shares. When their price falls below their nominal value, new offerings become less attractive. Companies may then prefer to buy back their shares rather than raising additional capital.

The latest weekly update from Strategy illustrates this trade-off. According to James Butterfill, the company allocated 193 million dollars to STRC share buybacks, against only 267 bitcoins purchased. It also raised its authorization for preferred share buybacks to 3 billion dollars. These operations can reduce future dividend expenses but mobilize capital that could otherwise finance new acquisitions.

Cash reserves offer a safety margin, even if Strategy has already sold part of its bitcoins to pay preferred dividends. Meanwhile, US spot Bitcoin ETFs maintain a central role. They have attracted about 57 billion dollars of cumulative net inflows and hold nearly 106 billion dollars in assets, according to Butterfill. Unlike preferred shares, ETFs can increase their holdings without requiring funds to commit to permanent dividend payments.