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MicroStrategy Books $48 Billion Bitcoin Gain, But STRC Shares Come Under Pressure

MicroStrategy’s Bitcoin holdings and cash now top its debt by $48 billion, but STRC preferred stock is still under pressure. That raises questions about the financing model.

By Luc Vesters
• 2 min read
MicroStrategy Books $48 Billion Bitcoin Gain, But STRC Shares Come Under Pressure

Key Takeaways

  • MicroStrategy says its Bitcoin and cash reserves exceed its debt by about $48 billion.
  • Since 2022, its Bitcoin holdings have grown from around 130,000 to about 843,700 BTC.
  • STRC shares often trade below $100, despite an 11.5% dividend meant to support the price.

Michael Saylor, cofounder of MicroStrategy, is celebrating a major financial turnaround: the company’s combined Bitcoin and cash reserves now exceed its debt by about $48 billion (€41.9 billion). That marks a strong recovery since the 2022 lows, when the crypto market was under heavy pressure and MicroStrategy’s debt briefly outweighed the value of its Bitcoin holdings.

MicroStrategy’s Recovery Since 2022

In October 2022, MicroStrategy held about 130,000 Bitcoin. Not long after, when the FTX collapse pushed Bitcoin below $16,000 (€14,000), the company’s debt briefly exceeded the value of its Bitcoin and cash by about $300 million (€262 million). Since then, MicroStrategy has expanded its Bitcoin stash sharply to about 843,700 BTC, making it the largest public Bitcoin holder. This growth was helped by more than $60 billion (€52.3 billion) in financing raised, which Saylor presents as proof of persistence and confidence in Bitcoin.

Challenges for STRC Preferred Stock

Despite the impressive balance sheet results, MicroStrategy is dealing with challenges around its Variable Rate Series A Perpetual Stretch Preferred Stock (STRC). This preferred stock is designed to trade close to $100 (€87), with the dividend adjusted monthly to help support that level. Right now, the dividend stands at 11.5%, an increase meant to stabilize the share price. Still, STRC often trades below $100, recently in the high $80s, which raises questions about how sustainable the financing model really is.

STRC is not backed by Bitcoin and only gives a preferred claim on remaining assets, so it looks more like a credit product than a direct Bitcoin bet. The fact that MicroStrategy can only issue new STRC at or above par makes it harder to buy more Bitcoin when STRC is under pressure. That creates tension between Bitcoin’s price action, the financing structure, and how the market sees the company.

Why This Matters for European Investors

For European investors, it is interesting to see how MicroStrategy’s innovative financing tools, combined with a large Bitcoin position, place the company within the crypto market. STRC’s volatility and its dependence on a stable Bitcoin price may point to risks that go beyond traditional stocks, especially given the high share of retail investors in STRC. That could matter for investors looking for exposure to crypto-related stocks and trying to understand how complex financing structures affect market valuation.

Disclaimer: This content is for informational purposes only and does not constitute financial, investment, legal, or tax advice. The information provided may be incomplete, inaccurate, or outdated and should not be relied upon as such. Nothing on this website should be considered a recommendation to buy, sell, or hold any cryptocurrency. Investing in crypto-assets involves risk of loss.