1 day ago
13
Michael Saylor has found his financial perpetual motion machine, or at least he thinks he has. The Strategy executive chairman revealed that issuing the company’s Variable Rate Series A Perpetual Stretch Preferred Stock, ticker STRC, at a rate equal to just 2.3% of the firm’s Bitcoin holdings transforms Strategy into a permanent net buyer of BTC.
In English: even when the company sells some Bitcoin to cover dividend payments on STRC, the capital raised from issuing new preferred shares more than offsets those sales. The math works out so that Strategy always ends up with more Bitcoin than it started with, as long as Bitcoin appreciates at least 2.3% annually.
How the STRC flywheel works
STRC is a preferred stock with variable dividends that adjust monthly based on market conditions and Bitcoin’s performance. The current dividend rate recently climbed to 12.00% as of July 2026, making it an attractive instrument for income-focused investors who want crypto exposure without the full volatility roller coaster.
Strategy issues STRC to raise capital, uses that capital to buy Bitcoin, and then pays dividends on the preferred stock. Some of those dividend payments get funded by selling small amounts of BTC. The company recently sold around 1,638 BTC to manage capital and dividend obligations.
But here’s where Saylor’s math kicks in. If the STRC issuance stays at or below 2.3% of total Bitcoin holdings, the new BTC purchased with the proceeds exceeds whatever gets sold to fund dividends. The net effect is always positive. Strategy always ends up holding more Bitcoin.
The numbers behind the strategy
Strategy now holds approximately 842,000 BTC as of early August 2026, with a USD reserve approaching $4 billion. That’s a staggering amount of Bitcoin for a single corporate entity, roughly 4% of Bitcoin’s total supply that will ever exist.
The STRC instrument frequently trades around its $100 par value, which matters because it determines how much capital each share issuance actually generates. During periods of heightened demand, issuance rates of STRC have reached double-digit percentages, suggesting strong market appetite for the instrument.
The company has leaned heavily into Bitcoin per share as a key performance indicator. Rather than traditional metrics like revenue growth or EBITDA, Strategy measures success by how much Bitcoin each common share represents.
The dividend yield of approximately 11.5% to 12% on STRC positions it as a high-yield instrument. STRC funding has facilitated tens of thousands of BTC acquisitions since the instrument launched in July 2025.
What this means for investors
Saylor’s perpetual buying framework rests on Bitcoin appreciating more than 2.3% per year. A prolonged bear market could stress the model significantly. Strategy would still need to pay dividends on STRC while the value of its Bitcoin collateral declines.
There’s also the question of market saturation. STRC works because investors want it. The 12% variable dividend is attractive today, but if risk appetite shifts or competing yield instruments emerge, demand for new issuances could dry up. Without fresh STRC issuance, the perpetual buying machine stalls.
For common shareholders, the key metric to watch is dilution. Strategy has structured STRC issuance to mitigate dilution of common stock, but billions in preferred shares outstanding create a significant layer of obligations that sits above common equity in the capital structure.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
English (US) ·