Bitcoin Rally Driven by Strategic Purchases and Long-Term Holders
Bitwise Chief Investment Officer (CIO) Matt Hougan has highlighted that Bitcoin’s impressive 20% rebound from its lows in February was primarily influenced by strategic moves from investment firms, particularly exchange-traded fund (ETF) issuers, along with long-term holders of the cryptocurrency.
Hougan noted that in an eight-week period, Strategy Investments injected a remarkable US$7.2 billion (approximately AU$10.37 billion) into Bitcoin, further supported by its issuance of STRC preferred stock. As of its latest filing on April 27, Strategy disclosed that it held 818,334 BTC, following the acquisition of an additional 3,273 BTC funded by proceeds from common-stock sales.
Despite the rise, it was Strategy that emerged as the most significant buyer during this phase. The STRC, or Strategy’s Variable Rate Series A Perpetual Stretch Preferred Stock, is designed to offer a yield while maintaining a trading value close to US$100 (about AU$144) per share. Initially, the dividend was set at 9% upon launch, but has since been increased to 11.5% as the company adjusted the rate to sustain demand.
Preferred Stock Funding Mechanism
The first STRC offering was priced in July 2025 at US$90 (around AU$129.60) per share, with expectations of raising net proceeds of US$2.474 billion (approximately AU$3.56 billion). At that time, Strategy planned to allocate these funds for various corporate purposes, including further Bitcoin acquisitions and working capital.
As reported in Strategy’s February results, the aggregate stated amount for STRC had surged to US$3.4 billion (AU$4.90 billion) as of February 1, with a prevailing dividend rate of 11.25%. According to Chief Executive Phong Le, the variable dividend model has allowed STRC to maintain its value near the US$100 (AU$144) benchmark, even amid a challenging Bitcoin price landscape.
Hougan expressed that this funding structure remains appealing, especially as yields on junk bonds have fallen below 7%, leading investors to seek more lucrative opportunities. He estimates that Strategy could potentially raise an additional US$10 billion to US$15 billion (AU$14.4 billion to AU$21.6 billion) through further STRC offerings at current Bitcoin valuations before financial obligations invite increased scrutiny.
Recent filings from Strategy confirmed ongoing purchases of Bitcoin, but these did not utilise STRC for the transactions that week. Its April 27 filing indicated the acquisition of 3,273 BTC for US$255 million (AU$367.2 million) between April 20 and April 26, averaging US$77,906 (around AU$112,184.64) per Bitcoin, using revenue generated from common-stock sales.
The dynamics in the cryptocurrency market exemplify a blend of strategic investment, economic adaptability, and the growing confidence of long-term investors, indicating a robust outlook for Bitcoin formed by strategic investments and supportive structures like the STRC.
