Bitcoin yields and debt models in the crypto treasury trade

Strategy’s Bitcoin Treasury Volatility

Strategy holds 840,447 Bitcoin as of August 2026. The company sold 3,328 Bitcoin for $213.3 million across two reporting periods. These sales reduced the Bitcoin reserve from 847,363 Bitcoin on June 22 to 840,447 Bitcoin. I see the extreme volatility in this treasury model. Strategy reported a $12.54 billion net loss in the first quarter of 2026 because $14.46 billion in unrealized Bitcoin losses hit the balance sheet, even though revenue reached $124.3 million after a 11.9% increase, which pushed the operating loss to $14.47 billion. The company’s Bitcoin had a cost basis of $61.81 billion and a market value of $64.14 billion as of May 3. In August, the company sold 1,690 Bitcoin for $108.6 million at an average price of $64,262. It used $52.3 million from that sale to repurchase 1,152,020 STRC shares at an average of $94.29 per share. The remaining $52.4 million went toward preferred-stock dividends. Strategy also holds $150 million of STRC in corporate treasuries and more than $270 million in DeFi protocols. The company reported a 9.4% Bitcoin yield and $4.97 billion in Bitcoin gain year to date. In the first quarter, the company raised $7.37 billion through at-the-market offerings and $4.32 billion from April 1 through May 3. The total amount raised year to date is $11.68 billion.

Capital structure and the STRC model

The 10-for-1 stock split in August 2024 changed the accessibility of Strategy stock. The company uses STRC, a perpetual preferred stock, to fund Bitcoin expansion. STRC carries a 12% annual dividend. The company also uses at-the-market programs to sell MSTR common stock. In August, the company sold 6,585,329 shares to generate $653.1 million in net proceeds. These proceeds added $650 million to the USD reserve, which reached $4.65 billion on August 9. You should look at the dilution from these frequent common stock sales. Strategy has 423.85 million adjusted shares outstanding. The company has $34 billion in total issuance capacity to buy more Bitcoin. The USD reserve provides about 2.3 years of coverage for annual preferred dividends and interest expenses of $1.76 billion. The company also has a $1 billion repurchase program for STRC and a separate $1 billion MSTR common stock repurchase program. STRC trades at $99.96 with an 11.50% yield and $8.54 billion in notional value. It averaged $381.1 million in daily trading with 3.1% volatility. The USD reserve stood at $3.75 billion in late July and provided 2.1 years of coverage. Adding $250 million lifted the balance to $4 billion and extended the coverage to 2.3 years.

Marathon’s debt arbitrage strategy

Marathon Digital Holdings uses a different approach by buying back debt at a discount. The company spent $912.8 million to repurchase $1 billion of principal on zero-coupon convertibles due in 2030 and 2031. This buyback happened at a 9% discount to par. Marathon recognized a $70.6 million gain from this transaction.

The company also has an outstanding $950 million offering of 0.00% convertible senior notes due in 2032, which was priced on July 23, 2025. Initial purchasers have an option to acquire an additional $200 million. Marathon expects to use up to $50 million of the proceeds from these notes to repurchase 1.00% convertible senior notes due in 2026. This offering is aimed at qualified institutional buyers. Marathon has a market cap of $6.18 billion and a technical sentiment signal of Buy. The company’s future performance relies on Bitcoin price recovery and operational improvements. The net proceeds from the $950 million offering are for repurchasing existing convertible notes, capped call transactions, acquiring Bitcoin, and general corporate purposes.

Divergence in Bitcoin beta

The difference in Bitcoin beta between a treasury holder and a miner is obvious. When Bitcoin rose 3% to $80,105.20, Strategy’s 843,775 Bitcoin holdings helped the stock jump 10% to $135.40. MARA Holdings rose 9% to $12.18 on the same move. I recommend Strategy for direct Bitcoin exposure. MARA’s mining economics lag the spot price because of hash price and energy costs. MARA stock is up 25% year to date through Wednesday. Strategy remains down 19% year to date through Wednesday. The price for Strategy stock was $146.01 as of October 23. Will the Bitcoin price stay high enough to support these leveraged models?