Saylor's Bitcoin Holdings Surpass BlackRock, How Does This "Bitcoin Financing Machine" STRC Work?

Original Article Title: "Bitcoin Holdings Surpass BlackRock, How Did STRC Become the Strategy 'Money Printer 2.0'?"
Original Source: DeepTech TechFlow

Funding Capacity Does Not Equal Execution Path, Bitcoin's ability to cooperate is the real variable.

On April 20, Saylor posted a screenshot on Twitter, showing Strategy's Bitcoin holdings tracker, with the caption "Think Even Bigger."

24 hours later, the answer was revealed: 34,164 BTC, $2.54 billion, with an average purchase price of $74,395 per BTC. The third-largest single transaction in history and the largest weekly purchase this year.

But more importantly, another number: 815,061.

This is Strategy's total Bitcoin holdings as of April 19. On the other side of the Atlantic, BlackRock's IBIT, the world's largest Bitcoin spot ETF, holds 802,823 BTC.

Saylor's company's Bitcoin holdings have officially surpassed BlackRock's.

Two Logics, Two Machines

To understand the significance of this, we first need to understand how these two institutions have accumulated Bitcoin.

BlackRock's IBIT is a pump. It draws funds from retail and institutional investors in the market, converting them into Bitcoin purchasing power. In the past week, IBIT has seen a net inflow of about $900 million, equivalent to adding about 12,000 BTC. The ceiling of this mechanism is market sentiment—funds flow in during a bull market and flow out during a bear market, following the tides of the market.

Strategy is a different beast. It doesn't wait for money to come in; it proactively goes out to finance BTC purchases.

Looking inside the $2.54 billion purchase, the financing structure reveals: 21,795,389 shares of STRC preferred stock, cashing out $2.176 billion; 2,165,000 shares of common stock, cashing out $366 million.

85% comes from STRC, 15% comes from MSTR common stock.

What is STRC: Saylor's 'Money Printer 2.0'

The Bitcoin Accumulation History of Strategy can be divided into two eras.

From 2020 to 2024, it relied on Convertible Bonds. By issuing zero-coupon or low-coupon convertible bonds to institutional investors, receiving money to buy Bitcoin, and betting that the price of Bitcoin would increase by more than the cost of debt. This approach was effective but had a ceiling. Convertible bonds have maturity dates, and every issuance had to consider the window period. If the interest rate environment deteriorated, the space would narrow. The fundamental issue was that the creditors of the convertible bonds were bondholders, not Bitcoin believers, and they ultimately needed to recoup their principal.

By the end of 2025, Strategy introduced STRC, Perpetual Preferred Stock, with a fixed face value of $100 and a floating dividend. The key is the word "Perpetual," with no maturity date, no need for repayment of principal, only continuous dividend payments. Saylor himself called it the company's "iPhone moment."

Its mechanical principle is as follows:

Strategy issued STRC on the market at a price of $100 per share. Buyers received a commitment: to receive an annual floating dividend, with the dividend rate dynamically adjusted based on the market price of STRC, aiming to keep STRC always anchored around the $100 face value. Strategy received this money and used it all to buy Bitcoin.

There is an automatic stabilizer design here. If STRC falls below $100, it means the market considers the current dividend insufficiently attractive, so Strategy raises the dividend to bring the price back; if STRC rises above $100, indicating overheated demand, Strategy reduces the dividend to suppress the premium. The price is always sheared around the face value, and Strategy's issuance window remains open.

Last week, the peak daily trading volume of STRC reached $750 million, with a daily average trading volume of over $300 million, almost becoming the most liquid preferred stock in the U.S. market. But liquidity is only superficial. The real driving force of this machine depends on three conditions that must be met simultaneously to be maintained.

Condition One: STRC must be maintained at a $100 face value.

This is the physical switch of the entire system. Strategy only actively issues new shares when the STRC price equals $100. Issuing below face value means Strategy is selling its financing capability at a discount, effectively buying Bitcoin with money obtained at a 10% discount, instantly deteriorating the cost structure.

In March of this year, STRC had dropped below face value for three consecutive days. The flywheel didn't stop, but Strategy was forced to increase dividends, using a higher cost of financing to pull the price back.

Condition Two: MSTR's common stock must have a Price-to-Book Ratio (mNAV) greater than 1.

Strategy's ultimate goal is not to buy Bitcoin, but to increase the "Bitcoin per share" ratio.

When MSTR's market cap exceeds the market value of the Bitcoin it holds (mNAV> 1), issuing common stock to buy Bitcoin is cost-effective. It's exchanging paper at a premium for the real asset, increasing the Bitcoin per share amount, benefiting existing shareholders. But once the mNAV falls below 1, the logic completely reverses: issuing common stock turns into a discount liquidation, with each new share issued, the Bitcoin per share amount decreases, dilution becomes a real harm. After the announcement of this purchase, MSTR actually dropped by 2.5%, with mNAV sitting right around 1.0, making it the most sensitive reading on this machine at the moment.

Condition Three: Bitcoin's price cannot continue to fall.

This is the most fundamental condition and the most difficult variable to hedge against.

Strategy's balance sheet is almost entirely composed of Bitcoin, with a purchase cost of $6.156 billion, corresponding to the current holding's market value, which is roughly the break-even point.

Once the Bitcoin price remains below the average price of $75,527 for an extended period, two things will happen simultaneously: Strategy's net assets will shrink, STRC's credit endorsement will weaken, investors will question "whether this company can continue to pay dividends," and STRC will start to fall below face value, triggering Condition One in turn.

In simpler terms: this machine needs the Bitcoin price to stay at a level that convinces the market that "Strategy's assets can cover its liabilities."

A report from the capital market analysis firm NYDIG describes this structure as a self-reinforcing feedback loop: STRC maintains face value → Strategy finances Bitcoin purchases → Bitcoin asset balance sheet expands → STRC's credit backing strengthens → issuance continues. When all three conditions are met, the flywheel spins faster and faster. When any one condition loosens, the flywheel doesn't immediately stop but starts consuming reserves, increasing dividends, reducing common stock issuance, relying on the remaining financing capacity, gambling on the Bitcoin price coming back before exhausting the buffer.

This $25.4 billion purchase saw the majority of the funds raised and deployed within just two days, on Monday and Tuesday. $25 billion spent in two days, from issuance to execution. Such speed in the open market is almost unheard of. It is a testament to the flywheel's healthy state, demonstrating that when all three conditions are met, the machine's operational velocity can surpass anyone's imagination.

The Looming Question

However, this machine is not without risk, and the nature of the risk is more subtle than most people imagine.

BitMEX Research has previously noted in a report that the risk associated with STRC is "greater than short-term US Treasuries," but a more accurate statement would be: the risk of STRC lies not in whether the Strategy will default, but in who bears the losses once the flywheel slows down.

The answer is the STRC holders. The Strategy can reduce dividends without triggering a legal default, a fundamental distinction between perpetual preferred stock and bonds. With dividend cuts, the STRC falls below face value, investors face paper losses, but the Strategy does not go bankrupt.

This structure directs market pressure toward investors rather than issuers. This is Saylor's cleverness and the reason he is referred to as a "financial engineer" rather than just a "Bitcoin enthusiast."

Saylor's current calculation is: accumulate 1 million bitcoins by the end of 2026. He still has a gap of about 185,000 bitcoins. With the existing STRC issuance ($194.6 billion) and MSTR common stock issuance ($26.7 billion) supporting this goal, the target does not seem far off from a financing standpoint.

However, financing capacity does not equate to an execution path. Whether Bitcoin cooperates is the true variable.

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