Bitcoin News
MicroStrategy Bitcoin treasury analysis and funding strategy
The STRC funding engine stopped
The 13-week Bitcoin buying streak ended last week after MicroStrategy failed to add to its position. During the streak that began in late December 2025, the firm acquired 90,831 BTC. This accumulation program relied on common stock sales, convertible notes, and preferred equity offerings. When the STRC preferred share price dropped below the $100 par value, the company lost the primary funding vehicle that supported many of the large weekly Bitcoin purchases during the recent 13-week accumulation streak. With the STRC window closed, the company’s residual capacity fell to $76.5 million in ATM common stock sales. This amount lacked the scale of the peak weeks in the streak. The firm announced a new $4.2 billion STRD perpetual preferred offering with an 11.5% annual yield. This new offering acts as a fourth gear in the funding stack. The company also holds $2.25 billion in USD reserves to cover 60 to 100 days of preferred dividend obligations. The company also plans to repurchase $1.5 billion in debt at a discount, using cash reserves, share issuance, or Bitcoin sales.
The Bitcoin math and accounting reality
The company’s Bitcoin accumulation shows significant scaling through its various financing rounds. Between April 14 and April 20, the firm raised $555.5 million to buy 6,556 BTC at an average of $84,785. From May 19 to May 25, it generated $427 million through common and preferred shares to buy 4,020 BTC at $106,237. In a different period, the firm raised $74.6 million to buy 705 BTC at $106,495. MicroStrategy’s Bitcoin treasury comprises 818,334 BTC, which accounts for roughly 3.9% of the total supply. The firm acquired these tokens at an average cost of $75,537 per coin. The company’s Q1 2026 revenue reached $124.3 million, a 11.9% increase year-over-year. However, the company reported a $14.46 billion non-cash unrealized loss on its Bitcoin holdings. This loss drove a total net loss of $12.54 billion for the quarter. You likely realize the company’s accounting results change based on Bitcoin’s price. The massive operating loss of $14.47 billion stems from the fair-value treatment required for its holdings.
| Instrument | Type | Detail |
|---|---|---|
| STRC | Preferred Equity | Trades below $100 par |
| STRK | Preferred Equity | 8% coupon |
| STRF | Preferred Equity | 10% coupon |
| STRD | Preferred Equity | 11.5% annual yield |
The premium and the Terra comparison
The market assigns a 1.09 mNAV to the company, meaning the stock trades at a premium to its Bitcoin net asset value. This buffer provides room for the company to issue equity for more Bitcoin. Some observers compare the company’s strategy to the Terra collapse, but Joe Burnett of Strive Asset Management disagrees. Burnett notes that Terra had $18.7 billion in liabilities backed by only $3.1 billion in Bitcoin. In contrast, MicroStrategy holds roughly $51.5 billion in Bitcoin against $10.5 billion in liabilities. The company’s debt instruments have fixed maturity dates and do not allow for immediate redemption. This structure prevents the liquidity crisis that destroyed the Terra ecosystem. The stock trades at a premium even as Bitcoin trades 12% below the company’s average acquisition price of $76,052. Strive’s comparable perpetual preferred equity, SATA, trades down roughly 4% at $86.
The dividend and the exit risk
The company’s Bitcoin accumulation strategy faces pressure from its preferred share obligations. The firm has $20.7 billion in STRK authorizations and $2.1 billion in STRF authorizations sitting on the shelf. If the company draws these fully, it would face $1.9 billion in annual dividends. Management needs Bitcoin to appreciate about 14% annually after tax to cover these costs and operating losses. The company recently sold 32 BTC to cover preferred stock dividend obligations. This sale broke the long-term commitment to never sell Bitcoin. The sale was small, but it shows that preferred stock financing obligations can require liquidating treasury holdings. Can the company maintain its Bitcoin holdings if the premium to net asset value disappears? The strategy works as long as the premium stays positive, but the debt remains a heavy burden. The company must eventually pay the 8% STRK and 10% STRF coupons through more security sales or by liquidating Bitcoin.
