Strategy Pauses Bitcoin Buys to Spend $204.9M on STRC Buybacks
Strategy made no Bitcoin purchases during the week of October 19–25, directing $204.9 million toward buying back its STRC preferred stock instead. The company’s Bitcoin holdings remained unchanged at 848,517 BTC, according to its latest statement.
The company acquired its Bitcoin stash for a total of $64.02 billion, giving it an average purchase price of $75,446 per coin. Strategy also reported a cash reserve of $4.83 billion, which helps cover its preferred stock dividends and interest payments on debt.
The latest pause marks another shift in the company's approach to managing its Bitcoin treasury. Strategy has largely relied on selling shares and issuing convertible debt to raise funds for Bitcoin purchases. However, it has increasingly directed capital toward repurchasing preferred shares during periods when market conditions make the strategy attractive.
The company has also paused Bitcoin accumulation on several occasions this year. In one previous stretch, it went five weeks without buying before selling some of its holdings.
STRC Buybacks Take Priority
Strategy's latest repurchase follows a similar move in September, when it bought back approximately $176 million worth of STRC in a single week. Around the same time, the company increased its digital credit securities repurchase program from $1 billion to $2 billion.
STRC is a preferred stock designed to trade close to its $100 stated value. It pays a variable dividend, and its market price can move below that level when market conditions weaken.
When STRC trades at a discount, Strategy can retire more stated value than the cash it spends. For example, repurchasing shares at $86.52 allows the company to eliminate $100 in stated value for less than $87. This reduces the outstanding preferred stock claims and can improve the amount of Bitcoin backing each share of common stock, assuming its Bitcoin holdings remain unchanged.
The strategy therefore offers an alternative use of capital when buying back discounted preferred shares appears more attractive than adding to the Bitcoin treasury.
Bitcoin Price Remains Above Strategy's Cost Basis
Bitcoin traded near $80,000 on Monday, October 26, after briefly falling below that level during Asian trading hours. A weekend sell-off pushed the cryptocurrency into the low $79,000 range, its lowest level in more than a month.
Despite the decline, Bitcoin remained above Strategy's average acquisition cost of $75,446. At a price near $80,000, the company's holdings carried an estimated unrealized gain of roughly $3.9 billion.
Strategy's $4.83 billion cash reserve also provides funds for its preferred stock dividends and debt interest, reducing the immediate need to sell Bitcoin to meet these obligations.
However, its ability to continue buying back STRC depends on several factors, including whether the preferred shares trade below their stated value and how much cash the company raises through common stock sales.
For now, Strategy has opted to strengthen its capital structure rather than expand its Bitcoin position, highlighting how the company is balancing cryptocurrency accumulation with the cost of financing its treasury strategy.