While Strategy, the world’s largest corporate holder of Bitcoin, hinted at expanding its crypto purchases with confidence in a market rebound, it turns out that the company funneled significantly more capital into buying preferred shares. Industry watchers interpret this move as an effort to defend the price of its preferred stock to secure funding sources for future Bitcoin acquisitions.

According to data from Barchart on the 20th (local time), Strategy purchased 250 Bitcoins for approximately $21.5 million (approx. 28.5 billion KRW) between the 5th and 11th. This marks the company's smallest weekly purchase scale so far this year.

During the same period, Strategy poured about $192 million (approx. 254.9 billion KRW) into buying its own preferred stock, ticker 'STRC'—roughly nine times the amount spent on Bitcoin.

Previously, Strategy Chairman Michael Saylor stated on the 13th that Bitcoin appeared to have hit a bottom and hinted at scaling up purchases.

However, the underlying reason Strategy invested heavily in STRC appears to be an effort to push the preferred stock's price back up toward its $100 par value.

STRC is a preferred stock offering an annual dividend yield of 12%. Strategy has traditionally raised capital by issuing new STRC shares and using those funds to buy Bitcoin.

The catch is that if the price of STRC drops below $100, issuing the same number of shares yields less capital. In response, Strategy has been directly buying back its preferred stock to defend the price.

Earlier in the first half of the year, STRC plummeted to around the $75 level. Although it later recovered closer to $100, it has failed to close at or above $100 since May.

Consequently, the cost of price defense is mounting. Although Strategy stated it would reduce buybacks as the price of STRC approaches $100, the actual purchasing volume has instead increased.

Furthermore, Strategy’s remaining buyback authorization for STRC is rapidly shrinking. The remaining limit, which stood at approximately $621 million (approx. 824.4 billion KRW) at the end of last month, dropped to about $355 million (approx. 471.2 billion KRW) by the 11th.

Critics point out that if STRC fails to sustain a price around $100 even after its purchasing capacity diminishes, it could disrupt Strategy's ability to raise funds for Bitcoin acquisitions.

Strategy currently holds 843,775 Bitcoins, accounting for roughly 4% of Bitcoin's total supply limit.

Meanwhile, the company’s stock performance remains sluggish. Over the past year, Strategy's share price has fallen by 52%, and is down 13% since the beginning of this year. Over the same periods, the iShares Bitcoin Trust ETF (IBIT) dropped 23% and 9%, respectively.

Nevertheless, Wall Street's outlook remains largely positive. According to Barchart, the consensus rating from 19 analysts stands at a "Strong Buy," with an average target price of $233, reflecting an upside potential of roughly 71% compared to current levels.

[ⓒ Global Economic Times. 무단전재-재배포 금지]