Strategy, Strive face balancing act between bitcoin buying and preferred stock dividends

Strategy (MSTR) and Strive (ASST) are treasury companies that have a balancing act between purchasing bitcoin and issuing preferred stock dividends, according to Fidelity Digital Assets and analysts. While they need cash for their bitcoin purchases, they also need to maintain investor interest in their perpetual preferred stock as their primary fundraising vehicle.

As more shares circulate, the dividend payments increase, and these securities have financed about 136,000 bitcoins in the 20 months since their introduction. Strategy, the largest corporate bitcoin holder, has five different classes of preferred shares and is a bellwether for the model's durability. Their first offering, STRK, debuted in February 2025.

Fidelity estimates the bitcoin-focused preferred market at around $12 billion, with the global fixed-income market being $150 trillion, indicating room for growth. Companies use perpetual preferred shares to lower refinancing pressure and attract investors who may not want to own bitcoin directly. Mark Palmer, a senior equity research analyst at StoneX, notes that perpetual preferreds have brought bitcoin to income investors, a group not reached by ETFs.

Ryan Rasmussen of Bitwise expects ETFs to be the bigger demand channel for bitcoin in the long run, with preferred offerings serving as a second tailwind for a different type of investor. James Butterfill of CoinShares mentioned that STRC alone raised $7.5 billion during 2026 through late July, with a variable dividend around 12%.

However, this funding comes with recurring dividend costs. The price of these securities also reacts to management competence, issuer obligations, and capital-market conditions. For example, STRC briefly fell to $70 in late June, showing potential volatility. The demand for perpetual preferreds is reflexive, as continued buying depends on the securities trading near par.

Below par, fresh issuance becomes less attractive, and companies may prefer repurchases. Strategy has repurchased $193 million worth of STRC alongside buying only 267 bitcoins, while also increasing its preferred-stock repurchase authorization to $3 billion. U.S. spot bitcoin ETFs have attracted about $57 billion in cumulative net inflows and hold around $106 billion in assets.