Bitcoin News Today: Strategy Launches 5 Million Share Offering to Boost Bitcoin Holdings

Strategy, the world’s largest corporate Bitcoin holder, has launched a new kind of stock offering aimed at raising more funds to invest in the world’s first cryptocurrency. The company announced plans to conduct an initial public offering of 5 million shares of Strategy’s Variable Rate Series A Perpetual Stretch Preferred Stock (STRC).

The net proceeds from this offering will be used for “general corporate purposes, including the acquisition of Bitcoin and for working capital,” as stated in the announcement on Monday. Unlike previous offerings, the STRC Stock will accumulate cumulative dividends at a variable rate on the stated amount of $100 per share, with the initial monthly regular dividend set at 9% annually.

This announcement comes just two weeks after Strategy revealed a $4.2 billion at-the-market (ATM) offering, which serves as an equity-raising mechanism designed to enable the firm to sell newly issued shares to buy more Bitcoin (BTC). The new offering will be available through an initial public offering (IPO) to “select investors.”

Strategy’s new offering aims to adjust the monthly regular dividend rate per annum in such a manner as to cause the STRC Stock to trade at prices at or close to its stated amount of $100 per share. This mechanism makes the STRC stock akin to a “new financial lifeform” optimized to “convert fiat into Bitcoin at velocity,” according to Bitcoin author Adam Livingston. Livingston further explained that Strategy can tweak the rate each month to keep $STRC trading near $100 par like a synthetic stablecoin with yield, effectively making it a yield-targeted Bitcoin conduit.

This mechanism will enable Strategy to “attract fiat via yield” and “dollar-cost average into Bitcoin,” as added by the author. The new stock offering was announced shortly after Strategy bought $740 million worth of Bitcoin on Monday, at an average price of $118,940 per coin, signaling more confidence in Bitcoin’s price trajectory.

Bitcoin-focused treasury companies like Strategy and Metaplanet may drive Bitcoin to become a $100 trillion market opportunity, according to Adam Back, co-founder and CEO of Blockstream and the inventor of Hashcash. Back wrote in an April 26 post that a sustainable and scalable $100-$200 trillion trade front-running hyperbitcoinization is scalable enough for most big listed companies to move to BTC treasury.