Main Points:
- Strategy upsizes its Series A Perpetual Stretch (STRC) preferred stock from $500 million to $2 billion to fund further Bitcoin purchases.
- The offering carries a 10% initial annual dividend (floating rate), with a 10% discount to par.
- Underwriters include Morgan Stanley, Barclays, Moelis, and TD Securities.
- Recent weekly acquisitions: 4,225 BTC (week ending July 13) and 6,220 BTC (week ending July 20).
- Strategy’s total holdings now stand at 607,770 BTC (~$72 billion, 3.05% of supply).
- Market context: Bitcoin’s recent all-time high near $123,000 and evolving U.S. crypto regulation (Genius Act, pending Clarity Act).
1. STRC Offering Upsized Amid Robust Demand
On July 24, 2025, Strategy (formerly MicroStrategy) announced an expansion of its Series A Perpetual Stretch (STRC) preferred stock issuance from the originally planned $500 million to $2 billion. This decision, driven by overwhelming interest in Bitcoin-backed securities, will channel all proceeds into additional Bitcoin acquisitions. Offered at $90 per share (10% discount to the $100 face), STRC carries an introductory annual dividend of 9–10%, with the company retaining monthly adjustment rights to maintain par value stability. Underwriters Morgan Stanley, Barclays, Moelis, and TD Securities are leading the transaction.
Figure 1 illustrates the jump in targeted funding:
- Original Offering: $500 million
- Upsized Offering: $2 billion
2. Financial Structure and Dividend Mechanics
STRC is a perpetual preferred instrument, lacking maturity but offering floating dividends tied to an index, aimed at keeping share prices near $100. Unlike fixed-rate preferreds, Strategy’s variable-rate design helps absorb Bitcoin’s volatility, providing investors a hybrid of yield and capital upside. The security sits senior to common equity but remains unrated by agencies; however, Strategy’s deep Bitcoin reserves underwrite confidence among crypto-focused investors.
3. Recent Bitcoin Acquisitions and Treasury Growth
Strategy continues its aggressive Bitcoin accumulation. In the week ending July 13, the firm acquired 4,225 BTC for $472 million at an average price of $111,827, followed by a 6,220 BTC purchase (cost $739.8 million, average $119,010) in the week ending July 20. These buys raise Strategy’s total holdings to 607,770 BTC, now valued at roughly $72 billion (about 3.05% of the 19.9 million BTC in circulation).
Figure 2 charts weekly acquisitions in July 2025:
- Week ending 2025-07-13: 4,225 BTC
- Week ending 2025-07-20: 6,220 BTC
4. Strategic Rationale and Market Environment
Michael Saylor, Executive Chairman, has championed preferred-share financings since early 2025, replacing convertible debt with permanent capital to reduce redemption risk and maintain Bitcoin-buying firepower. The recent U.S. “Genius Act” regulating stablecoins and the pending Clarity Act have stirred market reactions: Bitcoin briefly surged to $123,000, while Strategy’s stock (MSTR) dipped on profit-taking and an analyst downgrade, then recovered on renewed confidence.
5. Risks and Considerations
While STRC appeals to yield-seeking crypto investors, the structure carries risks:
- Liquidity risk: Heavy reliance on Bitcoin collateral and investor sentiment.
- Dividend variability: Floating rate may shrink if underlying reference index falls.
- Regulatory shifts: Upcoming legislation could alter custody or tax treatment.
Conclusion
Strategy’s bold upsize to a $2 billion STRC offering underscores its unwavering Bitcoin accumulation strategy. By innovating with floating-rate perpetual preferreds, the firm leverages market demand to convert investor capital directly into additional BTC, aiming for a 1 million BTC treasury in the coming quarters. As U.S. crypto regulation evolves and Bitcoin price dynamics shift, STRC’s success will hinge on sustaining investor confidence and navigating potential liquidity constraints.
