A fresh, sizable bitcoin purchase by Strategy highlights changes in its funding strategy.

Strategy is increasingly turning to preferred equity to fund its bitcoin accumulation, marking a notable shift in its capital strategy as dividend costs climb.

For the first time, the company last week relied primarily on its STRC perpetual preferred stock to finance purchases. On Monday, Strategy reported buying 22,337 BTC over the previous week — its fifth-largest acquisition on record.

The majority of funding came from a $1.18 billion issuance of STRC, roughly equivalent to 16,800 BTC at an average price near $70,000. This significantly outpaced the $396 million raised through its at-the-market (ATM) common stock program, which has traditionally been its main funding source. The company’s total bitcoin holdings now stand at 761,068 BTC.

The shift, however, brings higher fixed costs. With STRC offering an 11.5% dividend, the latest issuance adds about $135 million in annual payouts, pushing Strategy’s total yearly dividend burden above $1 billion.

To offset these obligations, the company has built a reserve of around $2.25 billion in cash, providing a buffer against rising capital costs.

At the same time, weakness in its common stock — down more than 70% — appears to be influencing the strategy. Strategy is likely aiming to avoid further dilution, using equity issuance more selectively. Going forward, common stock sales may be reserved for periods when its multiple to net asset value (mNAV) is well above 1 or when additional liquidity is needed.

This suggests a reduced reliance on common equity and a growing dependence on preferred capital, with STRC becoming central to the firm’s funding approach.

There are also signs of pressure in the preferred market. STRC has traded below its $100 par value for three straight sessions following its March 15 ex-dividend date. With its one-month volume-weighted average price now below par, Strategy may look to lift the dividend by another 25 basis points to help stabilize the security.

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