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Strategy (MSTR) has re-entered the bitcoin market this week, acquiring 1,550 BTC for roughly $101 million. This marks its initial purchase since a contentious divestment of 32 bitcoin attracted scrutiny from investors and market analysts. The corporation officially announced the transaction in an 8-K filing submitted to the Securities and Exchange Commission on Monday morning.
Executive Chairman Michael Saylor corroborated the acquisition on social media, reporting that Strategy’s total bitcoin holdings now amount to 845,256 BTC. These were procured for just under $64 billion, at an average cost of $75,680 per coin. The most recent acquisition was made at an average price of $65,332 per bitcoin, approximately $10,000 below the firm’s acquisition cost. Consequently, the entire position reflects an estimated unrealized loss of about $10.5 billion based on current market values.
The funding for this acquisition was secured through at-the-market offerings of its Class A common stock. Last week, Strategy divested 1,409,600 MSTR shares, generating approximately $181 million. A portion of these proceeds was allocated to the bitcoin purchase, while the remaining funds elevated the company’s U.S. dollar cash reserves from $900 million to $1 billion. This strategic move, according to analysts, was essential to re-establish institutional trust.
Strategy’s resumption of purchasing activities follows a period of volatility. On June 1, the firm revealed it had sold 32 BTC between May 26 and May 31 for approximately $2.5 million. This was the first instance of the company selling bitcoin since late 2022, with the proceeds designated for a dividend payout on its STRC preferred stock.
Despite the small quantity involved, the disclosure had a significant market impact. Bitcoin’s price, which was trading near $73,700 prior to the announcement, experienced a decline of nearly 20%, reaching a low of approximately $59,300 before recovering to over $63,000 by the weekend.
Strategy shares saw a 6% increase in premarket trading.
Strategy’s action caused market jitters
JPMorgan analysts described the sale as “symbolic and voluntary” yet acknowledged that it ultimately “spooked” market participants. They pointed out that following Strategy’s agreement to redeem $1.5 billion in face value of its zero-coupon 2029 convertible notes at roughly 92 cents on the dollar, the firm’s dollar reserves could only cover about 6.3 months of preferred dividend obligations, raising concerns about its financial safety net.
Strategy’s STRC preferred stock, a variable-rate cumulative instrument yielding an annual rate of 11.5%, had been the principal instrument for accumulating bitcoin in recent weeks. However, STRC’s trading price has not been close to its $100 par value since mid-May, effectively rendering it unusable as a funding source for the past three weeks. The purchase made on Monday was instead financed through equity issuances.
As of June 7, there are approximately $25.96 billion worth of MSTR shares still available under Strategy’s existing ATM equity program. Furthermore, the firm has extended its ATM programs to allow for an additional $21 billion in MSTR shares, $21 billion in STRC preferred stock, and $2.1 billion in
Strategy possesses over 4% of bitcoin’s total supply cap of 21 million coins, a holding that significantly exceeds that of any other corporate entity. On Monday, bitcoin treasury firm Strive announced its acquisition of 32 BTC, increasing its total holdings to 19,032 BTC, valued at approximately $1.15 billion. Strive’s chairman presented this move as a direct reaction to the quantity Strategy had sold the previous week.
According to data from Bitcoin Treasuries, 198 publicly traded companies currently employ some form of bitcoin acquisition strategy. Prominent corporate holders following Strategy include Twenty One (holding 43,514 BTC), Metaplanet (40,177 BTC), MARA (35,303 BTC), Bitcoin Standard Treasury Company (30,021 BTC), and Bullish (24,300 BTC).
Details can be found on the website : bitcoinmagazine.com