Bitcoin treasury company Strategy has announced plans to expand its Bitcoin holdings by financing further purchases through preferred-share offerings. The firm’s executive chairman, Michael Saylor, said during the latest third-quarter earnings call that Strategy’s existing balance sheet enables it to generate up to $30 billion in digital credit, without the need for a common-stock capital raise or Bitcoin price gains.
Financing shift to preferred shares
The company, known for holding large amounts of Bitcoin on its balance sheet, is changing its approach to fundraising by moving away from traditional methods such as convertible debt and common-share sales. Strategy is instead prioritizing preferred shares—specifically its STRC offering—to fund further Bitcoin accumulation.
Michael Saylor, who leads the company’s strategic vision, highlighted the scope of this move by stating, “We could create $10 billion, $20 billion, $30 billion of digital credit.”
Michael Saylor said during the call that Strategy’s balance sheet allowed the company to generate as much as $30 billion in digital credit, opening new pathways for financing Bitcoin purchases without additional equity dilution or waiting for Bitcoin’s price to appreciate.
Chief executive officer Phong Le also reinforced this approach, saying issuance of digital credit has become the primary avenue for increasing the company’s Bitcoin exposure. “The primary way to acquire Bitcoin is by issuing digital credit,” Le noted.
Le mentioned that raising $1 billion to $2 billion in a month via preferred shares like STRC is plausible, and the team plans to allocate part of the proceeds to dollar reserves, while the remainder is directed to purchasing Bitcoin.
Mini dictionary: Preferred shares, often called preference shares, are a special class of equity that generally pay fixed dividends and take priority over common shares in corporate earnings and asset distribution, but they typically lack voting rights.
Current holdings and financial results
Strategy reported $19.53 billion in net income for the third quarter, mainly attributed to a $20.91 billion gain in the value of its digital asset portfolio. As of October 25, Strategy’s Bitcoin reserves reached 848,517 BTC, reflecting a 26% increase since the beginning of the year.
| Category | Q3 2024 Figures |
|---|---|
| Net income | $19.53 billion |
| Unrealized gain on digital assets | $20.91 billion |
| Total Bitcoin held | 848,517 BTC |
| Year-to-date Bitcoin increase | 26% |
The company clarified that the $30 billion sum discussed refers to the potential financing capacity, not an immediate or committed fundraising objective.
Strategy’s future direction
By focusing on preferred share offerings and digital credit, Strategy aims to accelerate its pace of Bitcoin accumulation while managing equity dilution and leveraging its existing assets. The company remains one of the largest corporate holders of Bitcoin globally, keen on setting new benchmarks for institutional investment in digital assets.
Phong Le explained that if the firm raises between $1 billion and $2 billion in a single month through STRC, it could channel the funds into both cash reserves and direct Bitcoin investments.
