Strategy Halts Bitcoin Purchases, Strive Adds 6,182 BTC in One Week, Major Shakeup at DAT Company

Author: Xiaobing

On Oct. 26 Eastern Time, Strategy (MSTR) filed a Form 8-K with the U.S. Securities and Exchange Commission, confirming that it neither bought nor sold Bitcoin between Oct. 19 and 25, did not sell any securities through its ATM program, and instead used $204.9 million in cash to repurchase 2,068,459 shares of STRC preferred stock. On the same day, Strive (ASST) disclosed that it purchased 6,182 Bitcoin at an average price of approximately $82,732 between Oct. 17 and 23, bringing its holdings to 43,000 coins, with weekly spending reaching approximately $511 million. In the same week, these two leading Bitcoin treasury companies took opposite directions.

Where Did Strategy's Money Go?

As of Oct. 25, Strategy holds 848,517 Bitcoin at a total cost of $64.02 billion, averaging approximately $75,446 per coin. According to calculations by The Block, the market value of this batch of Bitcoin is approximately $67.9 billion, yielding nearly $3.9 billion in unrealized paper gains.

Prior to this, Strategy had been buying Bitcoin for five consecutive weeks, but the scale remained small. According to CryptoTicker, since October, Strategy has repurchased roughly $664 million worth of STRC, while spending only $72.3 million on Bitcoin. The balance of capital allocation had already shifted long ago; this week simply zeroed out the Bitcoin purchasing side.

The average repurchase price this week was approximately $99.06, with STRC closing at $99.36 on Oct. 23, just $0.64 away from its $100 par value. When the repurchase program launched in July, the average transaction price was $86.52. With the current discount less than 1%, when solely considering the math of «discount redemption saving a 12% dividend», the cost-effectiveness of the repurchase has become quite slim.

The reason Strategy continues to buy lies in the par value itself. Company policy states that STRC will not be newly issued below $100; propping up the price to par value essentially paves the way for restarting preferred stock financing. As of Oct. 25, the digital credit securities repurchase program has $956.8 million in remaining quota; dedicated U.S. dollar reserves for paying dividends and interest stand at $4.83 billion, leaving only $242.4 million in freely adjustable U.S. dollar cash.

The path of issuing common stock is also challenging. MSCI passed new rules on Oct. 15 excluding «non-operating companies» from its Global Investable Market Index, with Strategy flagged during a May simulation test. The affected list will be published on Nov. 11 and take effect after the close on Nov. 30. Last week, MSTR fell 6.9%, closing at $146.02.

Strive Trades a 15% Coupon Rate for Bitcoin

The ammo for Strive's latest position increase came from a recently completed preferred stock financing deal. On Oct. 20, it issued 7 million shares of SATS perpetual preferred stock at $90 per share, raising approximately $630 million. SATS pays a fixed dividend of 15% based on a $100 par value, translating to an annualized yield of approximately 16.7% based on the issue price.

During the same week, Strive's Class A common stock increased by approximately 3.27 million shares, and cash and cash equivalents rose from $317.5 million to $504.4 million. It also established a new SATS equity distribution plan with a maximum size of $1 billion.

The cost of this capital is not low. The average purchase price of $82,732 sits above Bitcoin's price, which briefly dipped below $80,000 on Oct. 26.

Strive still holds 505,000 shares of STRC valued at a fair value of $50.18 million, gaining approximately $830,000 over the week. Every dollar Strategy spends propping up STRC also adds points to a competitor's ledger. Both companies' preferred stocks are competing for the same pool of yield-seeking capital: STRC offers a 12% annualized dividend, while SATS delivers a 16.7% issuance yield.

The Top Five Rankings Are Being Rearranged

According to data from Bitcoin Treasuries, after Strategy, Metaplanet (3350.T) holds 44,000 coins, Twenty One holds 43,514, Strive holds 43,000, and MARA holds 35,577. Strive is just 1,000 coins away from second place; at this week's pace, it could overtake them within a single week. CEO Matt Cole has stated multiple times that the goal is to secure the runner-up spot on the publicly traded coin holdings leaderboard by year-end.

The root cause of this divergence lies in the financing window. At the close on Oct. 16, MSTR's mNAV stood at approximately 1.08x, meaning issuing additional common stock to buy Bitcoin would barely be accretive to Bitcoin per share, while STRC remains capped below par value, simultaneously constricting Strategy's two primary financing channels. Strive has just opened a high-cost new channel and is in an expansion phase. One company is protecting its existing stockpile, while the other is scrambling for market share.

Strategy is set to release its Q3 earnings report on Oct. 29.