Strategy, Strive Balance Bitcoin Buying Against Preferred Dividends

Bitcoin treasury companies Strategy (MSTR) and Strive (ASST) face a delicate balancing act: they need fresh cash to keep buying bitcoin, yet must keep investors interested in the perpetual preferred stock that supplies it. That is the assessment of Fidelity Digital Assets and several analysts.

According to a Fidelity report by research analyst Zack Wainwright, preferred shares have funded purchases of 135,979 BTC since 2025, through Oct. 5. That is more than 0.5% of bitcoin's maximum supply. Strategy dominates the market with five preferred classes, the first of which, STRK, debuted in February 2025. Fidelity puts the bitcoin-focused preferred market at roughly $12 billion, small next to a $150 trillion global fixed-income market.

A new buyer base

Perpetual preferreds sit between debt and common equity, pay regular dividends, carry no voting rights and have no maturity date. That reduces refinancing pressure and draws investors who avoid owning bitcoin directly. StoneX analyst Mark Palmer said they have brought bitcoin to income investors, a group ETFs never reached. Bitwise's Ryan Rasmussen still expects ETFs to be the larger long-term source of demand, with preferreds a second tailwind aimed at yield investors.

The cost of funding

The obligations are real. CoinShares' James Butterfill said STRC, which pays a variable dividend currently around 12%, raised $7.5 billion in 2026 through late July, and that money carries a recurring dividend cost. Two Prime's Alex Blume noted STRC briefly dipped into the $70 range in late June, showing these securities react to issuer management and market conditions, not just bitcoin's price. It now trades around $99.40.

Palmer called demand for the securities reflexive: preferred-funded buying depends on trading near par. Below par, new issuance becomes less attractive and companies may favor repurchases. Strategy's latest weekly update showed $193 million spent buying back STRC against purchases of just 267 bitcoin, and its repurchase authorization rose to $3 billion, Butterfill said. Buybacks can cut future dividend costs but compete with bitcoin purchases, and Strategy has already sold some bitcoin to fund dividends.

By comparison, U.S. spot bitcoin ETFs have drawn about $57 billion in cumulative net inflows and hold around $106 billion. Redemptions can reverse ETF demand but leave no ongoing dividend commitment. Butterfill sees preferreds amplifying the cycle, supporting purchases when financing is favorable and fading as sentiment sours.