Strategy’s BTC metrics turn negative as cash reserve tops $3.2B

Strategy sold roughly 7.5 million common shares over the past two weeks and raised its designated U.S. dollar reserve to $3.225 billion while recording no Bitcoin purchases for four consecutive weeks. The company’s Bitcoin holdings remained unchanged at 843,775 BTC.

An SEC filing shows Strategy issued 2.73 million Class A shares between July 13 and July 19. Combined with earlier issuances in the prior reporting period, the company reported about $263.5 million in net common-stock proceeds in the latest week. Of that amount, $225 million was added to the designated dollar reserve. The filing reports no Bitcoin acquisitions during the period.

Strategy last bought Bitcoin on June 22, acquiring 520 BTC for roughly $35 million at an average price near $67,068. Between June 29 and July 5 the company sold 3,588 BTC for about $216 million, reducing its holdings from 847,363 BTC to 843,775 BTC.

The remaining Bitcoin position was accumulated at an average cost near $75,476 per coin, with a total book cost around $63.7 billion. At recent market prices the holding is valued at roughly $54 billion, producing an unrealized deficit of more than $9.4 billion.

The recent share issuances without matching Bitcoin purchases changed the company’s quarter-to-date capital-markets metrics. Strategy reported a quarter-to-date BTC Yield of -2.3%, a BTC Gain of -19,247 BTC and a BTC-dollar gain of about -$1.2 billion. Year-to-date metrics remained positive, with a BTC Yield of 5.8%, a BTC Gain of 39,325 BTC and a BTC-dollar gain near $2.5 billion.

Strategy increased cash to support an expanding preferred-stock program centered on STRC, a preferred security with a stated value of $100 and a variable annual dividend currently around 12%. STRC has traded below par since mid-May, slipping to about $75 in late June and trading near $87 more recently. A board-approved policy requires a minimum dollar reserve sufficient to cover at least 12 months of expected preferred dividends and interest; at about $3.2 billion the reserve would cover roughly 22 months of the roughly $1.76 billion in annual expected payments.

Dylan LeClair, a Bitcoin strategy executive at Metaplanet, noted that the recent common-stock sales and cash accumulation were aimed at restoring the preferred-stock funding channel. He said a recovery in preferred-security prices could narrow credit spreads and make new issuance economical again.

Analyst Adam Livingston calculated effects on common-equity Bitcoin exposure. Using only the $225 million added to the designated reserve, he estimated a reduction in exposure of about 0.074%, equal to a loss of roughly 107 satoshis per pre-sale share (about $25.7 million across the prior share base). Including the full $263.5 million in net proceeds, he calculated the transaction would be about 0.036% accretive, adding roughly 52 satoshis per existing share. Livingston estimated Strategy would need about $250.9 million of economic value from the issuance to leave common-equity Bitcoin exposure unchanged. The company did not disclose whether the $38.5 million difference between total proceeds and the reserve increase was held elsewhere, reflected timing, covered expenses, or was allocated to another balance-sheet category.

The SEC filing provides the figures behind the fundraising, reserve increase and pause in Bitcoin purchases. Company disclosures show cash levels, share counts and Bitcoin balances used to calculate the reported BTC Yield and BTC Gain metrics.