Bitcoin Treasury Firms' 1.3M BTC Hinges on Preferred-Share Demand

A big stockpile with a weak spot in its funding

Publicly listed companies now hold about 1.3 million bitcoin as corporate treasury assets. That is roughly 6.2% of the 21 million coins that will ever exist, spread across 180 firms counted by the tracker SatsIntel, according to an October 30 analysis by the exchange Bitfinex.23 Most of it sits with one company. Strategy, the former MicroStrategy, holds 848,517 BTC, about two-thirds of the corporate total.23

The size of the stockpile matters less than how it was paid for. Bitfinex focused on the high-yield preferred stock that Strategy and the smaller Strive now use to fund their purchases. It warned that if investors start demanding bigger discounts on those securities, the fundraising cycle could stall. In that case, companies might have to sell bitcoin to cover dividend payments they have already promised.23 Coverage of the analysis agrees on the core figures and the main risk.145 The disagreements show up in the wider data on valuations, and they point to a more fragile position than the headline number suggests.

How the funding works

The sector first grew by selling common stock at a premium to the bitcoin each share represented. Analysts measure that premium with mNAV, the ratio of a company's market value to its bitcoin holdings. When mNAV is above one, a company can sell new shares and buy more bitcoin per share than it had before.18 Strategy's mNAV peaked at 3.89x in November 2024. It then fell below one as bitcoin dropped in 2026, which meant the market valued the company at less than the coins it owned.12 An analysis by Samara Asset Group found that by October 2025, 26 of 168 tracked bitcoin-holding companies already traded below the value of their holdings. Its conclusion was that losing the premium pushes treasury firms toward debt or preferred stock, both of which rank ahead of common shareholders.11

That is what happened. Strategy's preferred lineup includes STRC, STRF, STRK and STRD. Strive issues a senior floating-rate preferred, SATA, which recently paid 13%, and a junior preferred, SATS, which pays a fixed 15% a year.23 Saylor said on Strategy's third-quarter call that the market for these bitcoin-backed income securities has six issuers and is worth $16 billion. He described the main way to add bitcoin as issuing digital credit, paying roughly a 12% dividend and capturing bitcoin returns he estimated at 30% to 40%.16

That plan only works if bitcoin's return stays well above the dividend rate and if buyers keep paying close to face value for the preferred shares. STRC shows how fragile that second condition is. The security traded below its $100 stated value from May, fell as low as $71.25 in June, traded in the $90s from August and closed at $99.34 on October 29.2 One analysis described June's drop below par as a "structural crack" because it cut off one of Strategy's main routes to raising money for bitcoin.17

Strategy is using its cash to support STRC, not to buy bitcoin

The clearest sign of strain is where Strategy's money is going. Weekly bitcoin purchases have slowed to roughly $20 million to $30 million. Meanwhile, the company has spent about $176 million to $193 million a week buying back STRC, and on October 19 its board raised the buyback limit to $3 billion.1215 In the week to October 25, it spent $204.9 million buying back more than 2 million STRC shares. It reported $4.83 billion in dedicated dollar reserves.3 Its quarterly report also disclosed bitcoin sales in a note dated July 24.15

Shareholders approved daily dividend record dates on October 28. STRC moves to the new schedule on November 1, and the other three preferreds follow on January 1, 2027.23 CEO Phong Le said STRC used to fall about 49 basis points around its monthly ex-dividend date, and the drop narrowed to about 36 basis points once payments became twice monthly. He expects daily payments to cut that further.2 The change affects only when dividends are paid, not how much.3 In practice, it is a technical fix for price swings in a security the company has spent heavily to keep near par.

There is a gap between Strategy's message and its actions. Saylor told analysts that treasury companies are buying 1.6 bitcoin for every coin miners produce, which he called a potential supply shock.16 Strategy's own weekly purchases are small, though, and it adds new coins slowly. Its October 25 purchase was 267 BTC.13 By that evidence, Strategy is putting its balance sheet and the price of its preferred shares ahead of growth for now.

Strive is still buying, at a price

Strive is moving faster. It bought 6,182 BTC between October 17 and October 23 at an average of $82,732 including fees, raising its holdings from 36,818 to 43,000 BTC. Its cash rose to $504.4 million.2 To pay for this, it sold 7 million SATS shares at $90 each, raising about $630 million against a $100 face value and $15 annual dividend per share. It set aside roughly $157.5 million, about 18 months of dividend payments, in reserve.3

Bitfinex said a discount on a new offering is not a sign of distress in itself, and pointed out that Strategy also launched STRC at $90.2 That is fair, but the cost is still steep. A company that sells $90 of stock and owes $15 a year on it is paying an effective yield above 16% before underwriting fees. Strive's 43,000 BTC also includes coins it gained by buying Semler Scientific in January 2026, not only coins bought with money raised from securities.3

Analysts disagree on the valuation numbers

The sharpest disagreements in the coverage are about valuation. Strategy's basic mNAV, which compares common-share market value with its bitcoin, fell to 0.58 on June 26, recovered to about 0.97 in September and stood at 0.87 in October. That equals 0.93 on a diluted basis. Strategy's own dashboard put the figure at 1.12x on the same day.12 The difference comes from Strategy changing its method in July: it now subtracts preferred stock and some convertible debt before measuring its holdings.12 One tracker showed 1.19x on October 30. On that tracker's framework, it also calculated that senior claims of $20.1 billion take priority over about 257,672 of the company's coins, around 30%.13 Another report said readings range from 1.06x to 1.24x depending on the provider. It cited The Block as saying the premium had hit an 18-month low even as Strategy reported a record third-quarter profit.19

The disagreement is itself a signal. When the same company can look discounted or at a premium depending on the method, investors are being asked to trust the company's own yardstick. Samara made the same point: different mNAV methods can show one firm both ways.11 A market where a record profit fails to move the premium has started pricing the preferred shares and debt that rank ahead of common stock, not just the bitcoin.

Price levels and index rules

The pressure is building near key price levels. Glassnode puts treasury companies' average cost at about $80,000 per coin, close to where bitcoin has been trading. Strategy's average is lower at $75,446, while some smaller holders, such as Metaplanet and Trump Media, are already showing losses on their holdings.912 Analysis from 24/7 Wall St. argued that spot ETF inflows, not treasury firms, have been holding bitcoin above $80,000. A sustained drop below that level would increase the risk of forced selling, mostly among smaller holders carrying debt or dividend obligations.9

Index rules add another deadline. On October 15, MSCI finalized a rule that makes "non-operating companies" whose balance sheets are dominated by a single asset ineligible for its Global Investable Market Indexes from November 30. It will publish the list of affected companies on November 11.12 Removal would force index funds to sell, putting pressure on the share price Strategy relies on to raise money.9

Custody rules are getting clearer, but not for treasury firms

Regulation is moving the other way. On October 1, the SEC proposed custody rules that would let registered investment advisers and regulated funds use state-chartered trust companies as crypto custodians. They would also allow advisers to hold crypto themselves where no qualified custodian supports an asset.29 Comments are due by December 7 or 60 days after Federal Register publication, whichever is later.30 The scope is narrower than some coverage suggests. For ordinary advisory clients, the rules cover crypto assets that represent funds or securities. For regulated funds, the SEC says native assets such as bitcoin are included when advisers hold them for the fund.2930 Coinbase Custody already holds most U.S. spot-ETF bitcoin, and BitGo and Anchorage hold national trust bank charters, so the final definition of a qualified custodian will decide who benefits.2123

Legislation has stalled. The CLARITY market-structure bill failed a Senate cloture vote 49-50 on September 15, so regulators are writing the rules themselves, and a future administration could reverse them.21 Separately, FinCEN withdrew its proposed reporting rules for self-hosted wallets and crypto mixing on October 5.28

The clearer custody rules make it easier for advisers and funds to hold bitcoin directly or through ETFs. That could reduce the appeal of treasury stocks as an indirect way to own bitcoin. The proposal does nothing for the actual problem facing treasury firms, which is the cost of paying for 1.3 million coins with promised yields of 12% to 15%.

The stockpile is real. Its weak point is that it depends on income investors continuing to buy preferred shares near $100. On current evidence, the sector's most important number is the trading price of STRC, not its bitcoin count.