Bitcoin Dividend

While many are still hesitating about whether to buy the dip, Strategy (formerly MicroStrategy) has resumed its buying spree.

According to an 8-K filing submitted to the U.S. Securities and Exchange Commission, the company purchased 7,633 BTC between February 3 and February 9 at an average price of $97,255 per Bitcoin, amounting to approximately $742.4 million.

As of now, Strategy holds a total of 478,740 BTC, valued at over $46 billion. The average purchase price of these Bitcoins is $65,033 per BTC, with a total cost of approximately $31.1 billion.

This acquisition was made after Strategy raised funds through the sale of its Class A common stock and 8.00% Series A Perpetual Preferred Stock. As of February 9, approximately $41.7 billion worth of stock remains available for sale under their “21/21 Plan,” which aims to raise a total of $42 billion over three years through stock and fixed-income securities to purchase Bitcoin.

In other words, Strategy will continue buying more Bitcoin in the future.

Notably, Strategy recently rebranded and adopted a new logo incorporating the Bitcoin symbol, as shown below.

The “B” in the new logo represents the company’s 478,740 BTC holdings (valued at $46 billion), making it the largest publicly traded Bitcoin holder. However, the latest earnings report reveals that in Q4 2024, Strategy recorded a net loss of over $600 million, with a per-share loss of $3.03, far exceeding market expectations.

But that’s not our focus today. What we’re discussing is the future of the Bitcoin premium on Strategy’s stock — will it rise, fall, disappear, or even turn negative?

As of February 11, 2025, at 6:52 AM, Strategy’s market capitalization carries a 101% premium over its Bitcoin holdings, as shown in the chart above.

What Does This Premium Mean?

Simply put, buying MSTR stock means paying far more than the market value of the Bitcoin the company holds. If you invest $100 in MSTR stock, you are effectively buying only $50 worth of Bitcoin at current valuations.

Why Does This Premium Exist?

For the sake of discussion, let’s define the premium as one that includes both MSTR’s software business and its Bitcoin holdings, calculated as follows:

For example, at the current Bitcoin price of $97,496, MicroStrategy holds 47,874 BTC, giving it a total Bitcoin value of approximately $46.7 billion. With a market capitalization of $93.6 billion, MicroStrategy’s valuation is 2.01 times its Bitcoin holdings, meaning the current premium rate is 101%.

Defining MSTR’s Premium: The Bitcoin Dividend

To be precise, MSTR’s premium is not just a Bitcoin premium but a Bitcoin “channel dividend”, which I will explain further.

My Prediction for the Future of MSTR’s Premium

This premium will eventually disappear — and in extreme cases, it could even turn negative.

However, for existing shareholders, the current high premium is incredibly profitable. If they sell their MSTR shares now, they can buy twice as much Bitcoin, effectively getting it at a 50% discount.

If you want to spot the next “MSTR” early and enjoy the Bitcoin dividend, you first need to understand why and how MSTR’s Bitcoin premium exists.

At its core, MSTR’s premium is the result of an imbalance between supply and demand, similar to the “Kimchi Premium” seen in South Korea’s crypto exchanges, where Bitcoin prices on Korean exchanges are higher than those on international exchanges.

As Bitcoin gains mainstream institutional recognition, the demand for direct Bitcoin investment channels has surged. MSTR stock has become an alternative, especially for institutional investors who prefer traditional financial markets over direct Bitcoin purchases.

Unlike Bitcoin, which can be bought freely on exchanges, MSTR stock has a limited supply. This supply-demand imbalance creates a stock premium.

If MSTR had no premium, it would be an even better investment than a Bitcoin ETF, since ETFs charge management fees, whereas MSTR pays dividends instead.

MSTR’s premium isn’t driven by strong business fundamentals but by market demand for a specific investment channel.

A “channel dividend” refers to extra returns or premiums generated because investors choose a more convenient investment method.

In Strategy’s case, this “channel” is its stock.

Bitcoin, as a decentralized and unregulated digital asset, is gradually gaining institutional acceptance, but buying and managing it is still challenging. Investors who wish to hold Bitcoin directly must overcome several hurdles:

• Regulatory & Transparency Issues: Many traditional investors prefer regulated investment channels. Direct Bitcoin purchases often require crypto exchanges, which lack the transparency and security of traditional finance.
• Storage Security Concerns: Holding Bitcoin requires cold wallets and other security measures, which are complex and costly. Institutions must ensure safe custody to prevent loss or theft.
• Operational Complexity: Transferring, storing, and trading Bitcoin can be difficult for traditional investors. Many prefer familiar investment vehicles over direct crypto management.

Because of these challenges, MSTR stock became a convenient alternative — investors could gain exposure to Bitcoin without dealing with storage and security. This demand for convenience is what drove MSTR’s stock premium, creating its channel dividend.

However, not everyone can take advantage of this premium.

Two key factors allowed MSTR to capitalize on the Bitcoin dividend:

Vision & Boldness

Back in 2020, amid the COVID-19 crisis, MicroStrategy was a struggling company with a $1.5 billion market cap. Even CEO Michael Saylor probably never expected that the company was about to enter a new era.

That year, Michael Saylor sat in his Miami home, deep in thought, searching for a way to rescue his struggling company. He keenly recognized that governments worldwide were printing massive amounts of money to combat the pandemic, and that inflation would become a major economic threat. This realization led him to reevaluate Bitcoin, the so-called “digital gold” that he had once dismissed with disdain.

Before long, Saylor became a staunch Bitcoin believer. He proposed to the MicroStrategy board that the company convert all its cash reserves into Bitcoin. At the time, this idea sounded outrageous — after all, MicroStrategy was a software company, not an investment firm. Yet, surprisingly, the board approved his proposal, perhaps because they saw no better option.

So, Saylor took half of the company’s cash — about $250 million — and bought Bitcoin at an average price of $11,000 per BTC. No one could have predicted that this decision would completely change MicroStrategy’s fate.

Over the following years, Saylor, like an indefatigable captain, steered MicroStrategy through the vast ocean of Bitcoin. He issued new stock and bonds at an unprecedented pace in corporate history, pouring all the funds into Bitcoin — and vowed to keep doing so. His conviction was simple: Bitcoin’s fixed supply of 21 million coins would drive its value higher over time, and MicroStrategy would reap the benefits.

With Saylor’s foresight and bold strategy, MicroStrategy quickly became the largest publicly traded holder of Bitcoin. Consequently, MSTR stock became one of the hottest investments in the market.

In the past year alone, MicroStrategy’s stock price surged by approximately 690%. This transformation turned Saylor into one of the most influential figures in the crypto world — he now has over 4 million followers on X (formerly Twitter) and has become a prominent advocate for Bitcoin.

Nothing lasts forever — not even dividends, especially channel dividends.

The Bitcoin dividend tied to MSTR’s stock premium is already fading.

As Bitcoin matures, more publicly traded companies are recognizing its value and adding Bitcoin to their balance sheets. Over the past few years, we’ve seen a rapid increase in both the number of publicly listed companies buying Bitcoin and the total amount of Bitcoin they hold. This is a clear signal that Bitcoin is transitioning from an alternative investment to a mainstream asset class.

According to the latest data from CoinGecko and Bitcoin Treasuries, as of February 2025, public companies worldwide collectively hold over 1,000,000 BTC. These companies include Tesla, MicroStrategy, Galaxy Digital, Block, and Hut 8 Mining, among others.

Although Strategy (formerly MicroStrategy) remains the largest corporate Bitcoin holder, the increase in Bitcoin holdings by other companies means that the market no longer relies on a single firm to gain Bitcoin exposure. As a result, MSTR’s stock premium is losing its foundation.

But Is the Disappearance of the Channel Dividend a Bad Thing?

Not necessarily — it might actually be a positive development.

The fading of MSTR’s premium signals that Bitcoin is becoming widely accepted. As adoption expands, broader and deeper demand for Bitcoin will emerge, which could ultimately drive Bitcoin’s price even higher.

MSTR’s Bitcoin dividend exists because its stock serves as a convenient channel for investors to gain exposure to Bitcoin.

Similarly, Grayscale’s GBTC once had a Bitcoin dividend — before the launch of Bitcoin ETFs, GBTC provided an easy way to buy Bitcoin on the stock exchange, despite its high 2% management fee. If you’re interested in how Grayscale built its empire, check out my older article, “GBTC: Devil or Angel?”

From GBTC to Bitcoin ETFs to MSTR, every innovation in investment channels has created channel dividends, leading to asset premiums.

However, whether it’s MSTR’s stock premium or GBTC’s past premium, the ultimate source of value is Bitcoin itself.

As a scarce and decentralized asset, Bitcoin’s impact goes far beyond price appreciation — it’s reshaping global financial systems, investment strategies, and market psychology.

As more individuals and institutions learn to hold Bitcoin directly, these premiums will fade. But this does not mean Bitcoin’s value will diminish. On the contrary, as Bitcoin becomes deeply integrated into global finance, new opportunities and dividends will emerge.

Ultimately, Bitcoin itself is the greatest dividend of our time.

Bitcoin is not just a safe haven for individuals and institutions — it is on the path to becoming a core asset of the global economy. Some institutions predict that if Bitcoin becomes a national reserve asset, its price could reach $42.3 million per coin. For more details, see “2049: Bitcoin at $42.3 Million — The Debt Solution of Bitcoinization.”

In this transformation, those who truly understand Bitcoin’s fundamental value will be the biggest winners.

At the end of the day, the reason Bitcoin dividends exist is that many people still don’t know how to hold Bitcoin directly.

I’ve written two free beginner guides:

1️⃣ How to Buy Bitcoin2️⃣ How to Store Bitcoin Using a Cold Wallet

I hope they help you.

I’m sharing all of this because the more people who can hold Bitcoin directly, the closer we get to Satoshi Nakamoto’s original vision — decentralization.