Bitcoin treasury companies like Strategy (MSTR) and Strive (ASST) face a tricky balancing act, according to Fidelity Digital Assets and analysts speaking to CoinDesk: they need cash to keep buying bitcoin, but they also need to keep investors keen on the preferred stock that funds those purchases.
Strategy (Credits: CoinDesk)
The tension is built into the model. As more preferred shares are issued, the dividend payments owed on them grow too, and those obligations, plus buybacks, could constrain how much bitcoin the companies can buy next.
Strategy Bitcoin Purchases Funded by Preferred Stock
Preferred stocks sit between debt and common equity in the capital structure, offering regular payouts but no voting rights. Since their introduction, these securities have financed purchases of some 136,000 bitcoin in 20 months, Fidelity research analyst Zack Wainwright wrote in a Tuesday report. That is more than 0.5% of bitcoin’s maximum supply.
Fidelity’s figures show that since 2025, preferred stocks funded purchases of 135,979 BTC through October 5. Strategy, the largest corporate bitcoin holder, dominates the market, with five different classes of preferred shares making it a bellwether for how durable the model is. Its first offering, STRK, debuted in February 2025.
Bitcoin was trading around $84,459 at the time of the report, and demand from treasury companies has been one of the forces supporting the market. That makes the balancing act important well beyond the two companies themselves.
Can Preferred Stock Keep Funding Bitcoin Buys?
Analysts expect exchange-traded funds to remain the larger source of bitcoin demand, with preferred shares attracting yield-focused investors instead. The question is whether that yield audience keeps growing fast enough to fund both new purchases and the rising dividend bill.
On one hand, the companies need fresh cash to fund purchases. On the other, they need to maintain appetite for new sales of perpetual preferred stock, their favoured fundraising vehicle. If investor appetite cools, or dividend obligations eat too much cash, the pace of buying could slow.
For now, the model has delivered: nearly 136,000 bitcoin bought through preferred financing in under two years. Whether it can keep delivering at the same pace depends on that balance holding, between buying more bitcoin and paying the investors who made the last round of buying possible.
This article reports on market analysis and does not offer investment advice.
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Source: CoinDesk — read the full story there.
