Fidelity Digital Assets sees potential for bitcoin demand to grow through dividend-paying preferred stock that companies issue to finance purchases, according to an analysis published Oct. 20 by research analyst Zack Wainwright. The firm points to the roughly $150 trillion global fixed-income market as a source of income-seeking capital that could flow toward these instruments.
Fidelity estimates the bitcoin-focused preferred-stock segment at approximately $12 billion, a small fraction of the broader income-investment market. The analysis said modest adoption within the fixed-income market could materially reshape bitcoin's supply-demand dynamics and position these instruments as a potential long-term value driver.
Preferred Stock and Bitcoin Purchases
These securities are preferred equity with no maturity date and appeal to investors seeking dividend income. According to Fidelity, preferred-stock financing supported purchases of 135,979 bitcoin by Oct. 5, including more than 95,000 between March and May.
That demand operates against bitcoin's limited issuance. Fidelity estimates nearly 96% of the maximum supply has already been issued, with the next halving expected in less than two years.
Strive's October Offering
Strive Inc. (Nasdaq: ASST) offered a current example when it closed an offering of its 15% Series A Perpetual SATS Preferred Stock on Oct. 20. The company sold 7 million shares at $90 each, generating $630 million in gross proceeds. The SATS shares carry a 15% annual dividend rate calculated on their $100 stated amount.
The financing can support bitcoin purchases, income-producing assets, working capital and share repurchases. Regular dividend dates begin Nov. 9 and fall on business days, with payments subject to board declarations and legally available funds. The offering broadens the company's financing options alongside its existing SATA preferred shares.
Strategy's Holdings and Buybacks
Strategy Inc. (Nasdaq: MSTR) reported holdings of 848,517 bitcoin after its latest acquisition in an Oct. 19 disclosure. It purchased 267 bitcoin for $22.1 million during the preceding week, using common-stock proceeds and cash.
Strategy also disclosed $192.4 million in STRC repurchases on Oct. 12, followed by another $193.1 million in its Oct. 19 update. Its latest figures showed approximately $17.51 billion available for STRC issuance and sales as of Oct. 18, with no STRC shares sold during the reporting week. Strategy held a $4.83 billion reserve intended for dividends and interest, plus $447.3 million in cash for broader corporate uses.
Risks and Economics
Fidelity cautioned that long-term economics depend on bitcoin appreciation exceeding the cost of income paid to preferred shareholders. The firm noted that these instruments carry risks beyond those associated with money market funds, with performance tied to both the cryptocurrency and the issuing companies.
