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Strategy's Bitcoin Bet: Perpetual Shares Fund Crypto
17 Mar
Summary
- Strategy purchased 22,337 Bitcoin for about $1.6 billion.
- Stretch perpetual preferred shares fund Bitcoin purchases.
- Strive Inc. invested $50 million in Strategy's perpetual shares.
Strategy, formerly MicroStrategy, acquired 22,337 Bitcoin between March 9 and March 15, with $1.2 billion funded by perpetual preferred shares. These securities, known as "Stretch," are marketed to offer Bitcoin exposure with reduced volatility. This marks Strategy's largest Stretch sale since its IPO and the first time these shares primarily funded its Bitcoin purchases.
Notably, Strive Inc., a Bitcoin treasury company co-founded by Vivek Ramaswamy, invested $50 million in Strategy's Stretch shares. This investment represents over a third of Strive's treasury and aims to generate a double-digit yield on capital previously held in low-yield money market funds.
Strive issues its own preferred shares with a 12.75% dividend and uses proceeds for Bitcoin. By investing reserves in Stretch's 11.5% yield, Strive aims to increase income, though it still faces a 1.25% gap on its own dividend obligations. This represents the first known instance of a digital asset treasury using another's preferred stock for dividend backing, highlighting a growing ecosystem dependent on Bitcoin's price stability.
