Michael Saylor, co-founder and executive chairman of Strategy, described a self-reinforcing cycle—which he called a "triple flywheel"—that links Bitcoin purchases, credit sales, and the company's stock premium. In his own words: "We sell the credit. We buy the bitcoin. We drive up the price of the bitcoin. We drive up the premium in the common stock. We can issue the common stock. We can buy the bitcoin. As the bitcoin goes up, the reserves go up. The risk on the credit goes down. The credit spreads compress. We sell more credit. We buy more bitcoin."
Tokenized exposure to Strategy securities
Blockchain-based tokens representing Strategy's common and preferred stock, MSTR and STRC, have reached a combined market capitalization of $475 million, up 3,467% over the past year, according to Token Terminal data. These tokens provide investors with digital exposure to Strategy's securities, with $204 million on Ethereum, $118 million on BNB Chain, and $80 million on Solana.
Strategy's daily trading volume has also outpaced the entire traditional finance industry, reaching $2.90 billion, according to a post by Bitcoin Archive on X.
Two sets of investors
Executives at Saturn Credit, a structured finance protocol for digital credit, explained Strategy's model as serving two groups: "fixed income oriented credit investors" and "Bitcoin maximalists that want to outperform Bitcoin and own amplified Bitcoin as MSTR."
At press time, STRC was trading at $99.49 after a 0.32% increase, while MSTR was at $141.40 after a 1.13% gain in the past trading session. Bitcoin was trading at $81,447.23, up 2% in the past 24 hours.
Shaky market dynamics
According to a previous AMBCrypto report, Strategy spent nearly $888 million on preferred-stock buybacks compared to $290 million on Bitcoin purchases between September 14 and October 18, reducing its cash reserves from $1.3 billion to $447.3 million. Meanwhile, whales accumulated 88,987 BTC, far exceeding Strategy's 3,466 BTC purchases. These dwindling cash reserves and dividend obligations have raised questions about whether they are limiting Strategy's future Bitcoin accumulation.
However, STRC remains the biggest and most liquid US perpetual preferred, suggesting the answer may be no.
