Bitcoin treasury companies Strategy and Strive are navigating a complex funding challenge as they balance purchasing the cryptocurrency with maintaining investor appetite for perpetual preferred stock—their primary fundraising vehicle.
Since early 2025, preferred stock offerings have financed purchases of approximately 135,979 bitcoin over 20 months, representing more than 0.5% of bitcoin's maximum supply. The preferred stock market focused on bitcoin now stands at roughly $12 billion, according to Fidelity research.
The Preferred Stock Model
Perpetual preferred shares sit between debt and common equity in the capital structure, offering regular dividend payouts with no voting rights or fixed maturity date. By selling these securities, companies attract income-focused investors who might otherwise avoid direct bitcoin ownership or traditional bitcoin exchange-traded funds.
Strategy, the largest corporate bitcoin holder, has established itself as a bellwether for the model. The company issued its first preferred class, STRK, in February 2025 and now manages five different preferred share classes. Strategy's STRC preferred stock raised $7.5 billion during 2026 through late July and currently trades around $99.40.
Growing Dividend Obligations
As the number of preferred shares in circulation increases, so do dividend payment commitments. This creates tension between three competing priorities: increasing bitcoin holdings per common share, meeting dollar-denominated dividend obligations, and avoiding bitcoin sales.
Strategy recently reported spending $193 million on preferred stock repurchases alongside purchases of just 267 bitcoin, and increased its preferred-stock repurchase authorization to $3 billion. Preferred stock buybacks can reduce future dividend costs but compete directly with bitcoin purchases for available capital.
Strategy has already sold some bitcoin to fund preferred dividends, according to analysts, suggesting cash reserves are under pressure.
Market Competition and Outlook
U.S. spot bitcoin ETFs remain the larger demand channel, attracting approximately $57 billion in cumulative net inflows and holding around $106 billion in assets. Analysts expect perpetual preferred offerings to complement rather than replace ETFs, reaching a different investor segment focused on yield.
The sustainability of preferred-funded purchases depends on these securities trading at or near par value. Below par, fresh issuance becomes less attractive and companies may prioritize repurchases over bitcoin acquisition. Preferred stock demand is reflexive, meaning it amplifies during favorable financing conditions but weakens as market sentiment deteriorates.
