Author: ShenChao TechFlow

On April 20, Saylor posted a screenshot on X, showing the Strategy Bitcoin holdings tracker, accompanied by three words: "Think Even Bigger."

24 hours later, the answer was revealed: 34,164 Bitcoins, 2.54 billion dollars, average purchase price 74,395 dollars per coin. The third largest single transaction in history, the largest weekly purchase so far this year.

More importantly, there’s another number: 815,061.

This is the total Bitcoin holdings of Strategy as of April 19. Meanwhile, across the Atlantic, BlackRock’s IBIT, the world’s largest Bitcoin spot ETF, holds 802,823 coins.

Saylor's company has officially surpassed BlackRock in Bitcoin holdings.

Two logics, two machines

To grasp the significance of this matter, we need to first clarify how these two institutions accumulate Bitcoin.

BlackRock's IBIT is like a water pump. It draws funds from retail and institutional investors in the market and converts it into Bitcoin purchasing power. In the past week, IBIT had a net inflow of about 900 million dollars, corresponding to an addition of about 12,000 Bitcoins. The ceiling of this mechanism is market sentiment; funds flow in during a bull market and flee during a bear market, and the holdings of IBIT follow the tide.

Strategy is something different. It does not wait for money to flow in; it actively goes out to raise funds to buy coins.

This purchase of 2.54 billion dollars, when broken down in terms of financing structure: 21,795,389 shares of STRC preferred stock, which raised 2.176 billion dollars; 2,165,000 shares of common stock, which raised 366 million dollars.

85% came from STRC and 15% from MSTR common stock.

What is STRC: Saylor's "money printer 2.0"

The history of Strategy’s Bitcoin accumulation can be divided into two eras.

From 2020 to 2024, it relied on convertible bonds. Issuing zero-interest or low-interest convertible bonds to institutional investors to raise money to buy Bitcoin, betting that the price increase of Bitcoin would exceed the cost of debt. This strategy worked but had a ceiling; convertible bonds come with an expiration date, and each issuance needs to consider the timing, and if the interest rate environment deteriorates, the space narrows. The more fundamental issue is that the creditors of convertible bonds are creditors, not Bitcoin believers; they ultimately want to reclaim their principal.

By the end of 2025, Strategy launched STRC, a permanent preferred stock with a fixed face value of 100 dollars and a floating dividend. The word "perpetual" is key; there is no expiration date, no need to repay principal, only the necessity to continuously pay dividends. Saylor himself refers to it as the "iPhone moment" of the company.

Its mechanical principle is as follows:

Strategy issues STRC on the market at a price of 100 dollars per share. Buyers receive a promise: to receive a floating dividend each year, with the dividend rate dynamically adjusted according to the market price of STRC, aiming to keep STRC always anchored around the face value of 100 dollars. Strategy uses this money entirely to buy Bitcoin.

There is a design of an automatic pressure regulator in place. If STRC falls below 100 dollars, it means the market thinks the current dividend is unattractive; Strategy then raises the dividend to pull the price back up; if STRC rises above 100 dollars, it indicates overheated demand, and Strategy lowers the dividend to suppress the premium. The price is always being pinched around the face value, ensuring that the issuance window for Strategy remains open.

Last week, STRC’s daily trading volume peaked at 750 million dollars, with an average daily trading of over 300 million dollars, making it one of the most liquid preferred stocks in the U.S. market. But liquidity is merely superficial; the real driving force of this machine is the three conditions that must be met simultaneously.

Condition One: STRC must maintain a face value of 100 dollars.

This is the physical switch of the entire system. Strategy only actively issues new shares when the price of STRC equals 100 dollars; issuing below the face value means that Strategy sells its financing capability at a discount, equivalent to using money obtained at a 10% discount to buy Bitcoin, which immediately worsens the cost structure. In March of this year, STRC had consecutively fallen below the face value for three days. The flywheel didn't stop, but Strategy was forced to raise the dividend, incurring higher financing costs to pull the price back.

Condition Two: The market-to-net-asset ratio (mNAV) of MSTR common stock must be above 1.

The ultimate goal of Strategy is not to buy Bitcoin but to increase the "amount of Bitcoin corresponding to each share."

When MSTR's market value exceeds the value of the Bitcoin it holds (mNAV > 1), issuing common stock to buy Bitcoin is profitable, trading a premium paper for tangible assets, increasing the amount of Bitcoin per share, benefiting existing shareholders. However, once mNAV falls below 1, the logic completely reverses: issuing common stock becomes a distressed liquidation; for every share issued, the amount of Bitcoin per share decreases, dilution becomes a real threat. Following the announcement of this purchase, MSTR actually dropped by 2.5%, with mNAV hovering just above 1.0, marking the most sensitive reading for this machine at the moment.

Condition Three: The price of Bitcoin cannot continue to fall.

This is the most fundamental condition and the most difficult variable to hedge.

Strategy's balance sheet is almost entirely made up of Bitcoin, with a purchase cost of 6.156 billion dollars, corresponding to the current market value of its holdings being approximately at breakeven. If Bitcoin prices remain long-term below the average of 75,527 dollars, two things will happen simultaneously: Strategy’s net assets will diminish, and the credit backing of STRC will weaken, leading investors to question "whether this company can continue to pay dividends," causing STRC to start falling below face value, triggering alert for Condition One.

To put it more plainly: this machine needs the Bitcoin price to maintain a level that allows the market to believe that "Strategy's assets can cover its liabilities."

Reports from the capital market analysis agency NYDIG describe this structure as a self-reinforcing loop: STRC maintains face value → Strategy finances to buy Bitcoin → Bitcoin balance sheet expands → STRC credit backing strengthens → continues to issue. When all three conditions are met, the flywheel spins faster and faster. If any one of the conditions weakens, the flywheel does not stop immediately; rather, it starts consuming reserves, raising dividends, reducing common stock issuance, relying on remaining financing capacity, betting on Bitcoin prices to recover before exhausting the buffer.

This purchase of 2.54 billion dollars was mainly raised and deployed within the span of two days, on Monday and Tuesday. Two days, 2.5 billion dollars, from issuance to order fulfillment. In the open market, such speed is almost unprecedented. This alone proves the healthy state of the flywheel; when all three conditions are met, this machine can operate faster than anyone's imagination.

The question hanging in the air

This machine is not without risk, and the nature of the risk is more subtle than most people imagine.

BitMEX Research pointed out in a report that the risks associated with STRC "far exceed those of short-term U.S. Treasury bonds," but a more accurate statement is: the risk of STRC does not lie in whether Strategy will default, but in who bears the loss once the flywheel loses momentum.

The answer is the holders of STRC. Strategy can cut dividends without triggering a legal default, which is the fundamental difference between preferred stock and bonds. A reduction in dividends leads to STRC falling below face value, resulting in paper losses for investors, but Strategy does not go bankrupt.

This structure directs market pressure onto investors, rather than the issuer. This is Saylor's smart move and the reason he is called a "financial engineer" rather than just a "Bitcoin believer."

Saylor's current calculation is to accumulate 1 million Bitcoins by the end of 2026. He has about 185,000 coins left to acquire. With the current STRC issuance limit (around 19.46 billion dollars) and MSTR common stock limit (around 26.7 billion dollars), from the perspective of financing capacity, this goal does not seem distant.

But financing capacity does not equal execution path. Whether Bitcoin can cooperate is the real variable.