On Sunday, Michael Saylor’s firm Strategy set off speculation with a social media post suggesting another major Bitcoin purchase could be on the horizon. Saylor shared the message “think bigger” alongside the company’s historical record of Bitcoin acquisitions—a phrase that has consistently preceded significant buying moves by the firm since 2020.
Record-breaking pace in Bitcoin accumulation
Strategy has been rapidly expanding its Bitcoin portfolio, completing 105 separate purchases since August 2020. The latest acquisition came on April 6, when the company bought an additional 4,871 BTC at a total cost of about $329.8 million. This brought their total Bitcoin holdings to a staggering 766,970 BTC.
The most recent purchases have pushed the company’s average purchase price up to $75,644 per Bitcoin. At the time these acquisitions were made, the market price of Bitcoin was almost $5,000 below what the firm paid, meaning an unrealized loss of approximately $14.5 billion, as revealed in SEC filings from the first quarter.
In March, Strategy’s buy of 46,233 BTC was nearly three times greater than the 16,200 BTC mined globally over the same period. Effectively, the company snapped up a huge chunk of the new Bitcoin supply singlehandedly.
Analysts have connected this accelerated pace of acquisition to the flexibility in Strategy’s funding model. Investors provide new capital through a preferred stock product called STRC, allowing the firm to continue large-scale buys without pause.
STRC model and investor returns
Michael Saylor has revealed that the annual break-even yield for the STRC preferred stock stands at around 2.05%. As long as returns remain above this rate, the company can maintain its dividend obligations without needing to issue more shares.
While the 2.05% yield may appear attractive to some investors, the sustainability of this funding model depends on Bitcoin’s price not experiencing prolonged flat or downward trends.
In recent weeks, hundreds of millions of dollars in new capital have flowed into the STRC product ahead of the dividend date, fueling Strategy’s continued buying spree. As long as investor interest holds, the company appears set to keep adding to its Bitcoin holdings.
On Monday, Bitcoin was trading at $71,800, marking a weekly gain of 7.9%. Notably, following news of a ceasefire in Iran, Bitcoin maintained a price above $70,000 for four consecutive days.
Whether Saylor’s “think bigger” message will precede another record-shattering purchase depends on the size of the coming acquisition. If the firm maintains its recent pace of buying more than 40,000 BTC each month, total assets could exceed 800,000 Bitcoin by the end of April.
