Saylor's Strategy Doubles Down With $1.25B Bitcoin Buy

Michael Saylor’s Strategy Inc. has added another 13,627 Bitcoin to its treasury, valued at approximately $1.25 billion at an average price of $91,519 per BTC. This purchase, made between January 5 and January 11, brings the company’s total Bitcoin holdings to 687,410 BTC, valued at around $62.3 billion. The move represents more than 3% of Bitcoin’s total supply and reflects Strategy’s continued commitment to its Bitcoin-centric treasury strategy.

The acquisition was funded using proceeds from the issuance of its Class A common stock (MSTR) and perpetual preferred stocks (STRC). This follows a broader capital-raising plan, known as the '42/42' initiative, which aims to raise $84 billion through 2027. The plan was expanded from an initial $42 billion '21/21' strategy, which was exhausted after the equity side was depleted.

Strategy’s preferred stocks include STRK, STRC, STRF, and STRD, each offering different risk-reward profiles and dividend structures. STRK is convertible with an 8% non-cumulative dividend, while STRD is non-convertible with a 10% non-cumulative dividend and the highest risk-reward ratio. STRF is non-convertible with a 10% cumulative dividend, making it the most conservative option.

Why Did This Happen?

The latest Bitcoin purchases align with Strategy’s long-term belief in the asset’s value and its potential as a store of value for corporations. The company’s stock price has been under pressure in recent months, with its market-to-net asset value (mNAV) ratio currently at 0.81, meaning the company is valued less than the Bitcoin it holds. Despite this, Strategy has continued to issue new shares to fund further Bitcoin acquisitions.

The company’s capital-raising strategy has also been adjusted in response to market conditions. Strategy’s expanded '42/42' plan now targets $84 billion in equity offerings and convertible notes through 2027. This reflects the company’s need to fund ongoing Bitcoin purchases as it continues to accumulate the cryptocurrency at a time when the broader market remains volatile.

What Happened in the Market?

The latest developments came after MSCI confirmed it would not immediately remove Bitcoin-focused treasury companies from its global equity benchmarks. The decision followed months of uncertainty over the eligibility of companies with significant digital-asset holdings, with Strategy and others warning of potential market instability if such firms were excluded.

Strategy’s stock responded positively to the news, with shares jumping as much as 7% in early trading. However, gains were later pared as Bitcoin prices pulled back into the low $91,000 range. The decision to retain digital asset treasury companies in MSCI indexes alleviated concerns about forced selling tied to index rebalancing, which had weighed on Strategy’s stock for months.

Despite the immediate relief, the broader crypto market remains under pressure. Bitcoin has been consolidating around $90,000, with institutional demand showing signs of waning. Spot ETFs have recorded net outflows this week, signaling a reduction in institutional investor interest. However, corporate demand for Bitcoin remains strong, with Strategy continuing its aggressive accumulation strategy.

What Are Analysts Watching Next?

Analysts are closely monitoring how Strategy’s capital-raising initiatives will impact its financial position and stock performance. The company has been issuing new shares at a rapid pace to fund Bitcoin purchases, which could dilute existing shareholders. At the same time, the company’s USD reserve has increased to $2.25 billion, providing additional liquidity for future acquisitions.

The broader market is also watching how MSCI’s interim approach to digital asset treasuries evolves. While the index provider has decided not to exclude such companies for now, it has signaled that further research is needed to distinguish between operating companies and investment-oriented entities. MSCI has another quarterly index review in May, with a June rebalancing expected to follow.

Additionally, the market is keeping an eye on institutional adoption of Bitcoin. South Korea has announced plans to lift a nine-year ban on corporate crypto investment, potentially opening up new avenues for institutional participation. The move is part of a broader digital currency strategy that includes the introduction of a central bank digital currency (CBDC) by 2030.

Overall, Strategy’s latest Bitcoin purchase reflects the ongoing debate around corporate Bitcoin ownership and the role of digital assets in institutional portfolios. While the company continues to accumulate at a large scale, the broader market remains cautious, with Bitcoin facing key resistance levels and institutional flows showing signs of fatigue.