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Bitcoin (
$76,387.00 ) ’s latest rally may still have room to run if Strategy keeps tapping STRC to fund new Bitcoin ( $76,387.00 ) purchases, according to Bitwise CIO Matt Hougan.
In his weekly memo, Hougan said Bitcoin ( $76,387.00 ) has climbed roughly 20% from its February lows and is trading near $76,000, supported by ETF inflows, renewed long term holder buying, and Strategy’s aggressive accumulation. He described Strategy as the single biggest factor behind the move after the company added $7.2 billion in Bitcoin ( $76,387.00 ) over the past eight weeks.
Strategy has funded those purchases through STRC, a perpetual preferred equity instrument designed to trade around $100 per share while offering a high dividend yield. The yield currently stands at 11.5%, after Strategy raised it from 9% to help keep the instrument near its target price.
Hougan said Strategy issues STRC mainly to raise capital for additional Bitcoin ( $76,387.00 ) purchases. While the dividend is largely funded by new capital raises, he argued the structure is backed by Strategy’s Bitcoin ( $76,387.00 ) holdings, which currently stand at about $63 billion.
Strategy also has $8 billion in debt and $14 billion in preferred equity, leaving total obligations at about 33% of its Bitcoin ( $76,387.00 ) holdings, according to the memo. Hougan said investors may begin asking harder questions if that figure moves toward 50%.
At current Bitcoin ( $76,387.00 ) prices, that still leaves room for another $10 billion to $15 billion in STRC issuance, Hougan said. He added that STRC’s 11.5% yield could continue attracting buyers as junk bonds yield less than 7% and investors move away from private credit.
Disclosure: This article was edited by Estefano Gomez. For more information on how we create and review content, see our Editorial Policy.
$2,285.78 ) : On-chain data
