Bitcoin Preferred Stock Flywheel' Hits 700K BTC - But Circular Credit Loop Risks BlackRock-Backed Disaster
Strategy's Bitcoin hoard now exceeds 700,000 BTC, but its self-funding credit loop could collapse if Bitcoin's price plummets or institutional demand dries up.
The company holds 709,715 BTC (~$64 billion) at an average cost of $75,979 per bitcoin, with $10.5 billion in paper gains. Funding sources include $1.8 billion from 10.4 million MSTR share sales, $294.3 million from 2.95 million STRC shares, and $3.4 million from 38,800 STRK shares.
STRC (11% dividend) and STRK (8% dividend) are issuer-managed perpetual preferred stocks with $3.6 billion and $20.3 billion remaining in issuance capacity, respectively. BlackRock's PFF ETF holds $470 million in Strategy preferreds (3.3% of fund), including $210 million in STRC.
Look, the STRC/STRK structure creates a self-reinforcing cycle where higher Bitcoin prices justify more preferred stock issuance, which funds more Bitcoin buying. But if BTC drops below $75,979, the math breaks - and BlackRock's $470 million bet could become a $470 million warning sign.
ā ļø LEGAL DISCLAIMER: This article is for informational purposes only and does not constitute financial or investment advice.
