Matt Hougan "Bitcoin's Rise, All Thanks to Strategy"

▲ Strategy (MSTR), Bitcoin (BTC)/AI generated image

It has been claimed that Strategy's aggressive buying strategy has driven Bitcoin (BTC)'s recent surge.

According to crypto media outlet BeInCrypto on April 29 (local time), Bitwise Senior Analyst Matt Hougan diagnosed that Bitcoin's recent rebound was driven by Strategy's continuous buying spree. Strategy invested approximately $255 million last week alone, acquiring an additional 3,273 BTC. Hougan assessed that such large-scale capital inflow is a key catalyst for supplying market liquidity and ensuring downward rigidity. Strategy's cumulative Bitcoin holdings now amount to 818,334 BTC, accounting for approximately 3.9% of the total circulating supply.

Strategy fully funded this Bitcoin purchase by selling its own shares (MSTR), solidifying its Bitcoin accumulation model utilizing the capital market. The company secured approximately $255 million by selling 1,451,601 shares of common stock last week. Particularly noteworthy is the fact that the company's newly introduced variable dividend preferred stock, STRC (Stretch), is emerging as a major funding engine for Bitcoin purchases. STRC is regarded as an innovative financial product that pays monthly cash dividends and converts Bitcoin returns into stable dividend income.

STRC preferred shares offer a high dividend yield of 11.5% per annum, attracting significant capital from traditional financial investors. Michael Saylor, Chairman of Strategy, expressed confidence that even if Bitcoin's price rises by just 2% annually, STRC's dividends can be permanently covered without additional stock issuance. In fact, funds raised through STRC issuance during March alone amounted to $1.18 billion, significantly surpassing the $396 million from common stock sales during the same period. STRC holders have now become the key capital lifeline driving Strategy's Bitcoin accumulation machine.

Hougan analyzed that even during a period when capital inflows into Bitcoin spot ETFs were somewhat stagnant, Strategy's buying activities were driving market demand. He added that Strategy's process of transforming Bitcoin from a mere asset into the underlying asset of a financial product is injecting new vitality into the market. In particular, STRC's structure, which offers stability similar to money market funds (MMFs) while supporting Bitcoin's upside potential, has established it as an attractive alternative for institutional investors.

However, concerns also exist regarding Strategy's aggressive funding methods. Criticisms include the potential dilution of value for existing shareholders due to funding through stock issuance, as well as the risk that the leverage effect could work in reverse if Bitcoin prices fall. Nevertheless, Phong Le, President of Strategy, clearly stated his intention to further expand the Bitcoin treasury strategy based on the introduction of fair value accounting standards and credit rating resets. Strategy is utilizing all means in the capital market to achieve its goal of holding 1 million BTC.

*Disclaimer: This article is for investment reference only, and we are not responsible for investment losses based on it. The content should be interpreted for informational purposes only.*