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1. Strategy preferred stock dividends and the bitcoin buying trade-off
Strategy (MSTR) and Strive (ASST), two companies that hold bitcoin on their balance sheets, are balancing a growing bill for preferred stock dividends against their appetite for buying more bitcoin, according to research from Fidelity Digital Assets and several analysts quoted on October 24, 2026. Preferred shares financed purchases of 135,979 BTC through October 5, but the payouts they carry now compete for cash.
Both firms buy bitcoin and, through that buying, help sustain demand for the asset. The difficulty is that their favored funding tool, the perpetual preferred share, requires a steady flow of investors willing to buy new issues, and every share sold adds to the dividends the issuer must pay.
The question matters beyond the two companies. Corporate buyers have become a visible part of the bitcoin market, and the way they finance purchases determines how reliable that demand is when markets turn. A funding method that works in calm conditions but becomes costly under stress would make corporate buying less steady than it appears in good times.
2. How do perpetual preferred shares work?
A perpetual preferred share is a security that ranks between debt and common equity in a company's capital structure. It pays regular dividends, has no maturity date and carries no voting rights. Holders are paid before common shareholders if the issuer distributes cash or is wound up, but they stand behind lenders.
The absence of a maturity date matters to companies such as Strategy, because it removes the need to refinance a loan at a fixed future date. The cost is the recurring dividend, which is a dollar-denominated obligation that does not shrink when the price of bitcoin falls.
Strategy is the largest corporate holder of bitcoin and dominates this corner of the market. It has issued five classes of preferred stock, and its first, with the ticker STRK, debuted in February 2025. Strive has its own preferred product, SATA. The pair are widely seen as the template for how a bitcoin treasury company can raise money without selling common shares.
3. How much bitcoin have preferred shares bought?
Zack Wainwright, a research analyst at Fidelity Digital Assets, wrote in a report published on a Tuesday that perpetual preferreds have funded roughly 136,000 BTC in the 20 months since the structure was introduced. That total, equal to 135,979 BTC through October 5, is more than 0.5% of bitcoin's maximum supply of 21 million coins.
Fidelity estimates the market for bitcoin-focused preferred stock at about $12 billion. It sets that figure against a global fixed-income market of about $150 trillion, which it presents as evidence of the room the category has to grow if investor interest persists.
4. Why do preferred shares attract yield investors?
Part of the appeal is that preferreds offer a route to bitcoin-linked returns for investors who do not want to hold the asset directly. Mark Palmer, a senior equity research analyst at StoneX, said perpetual preferreds have brought bitcoin to income investors, a group that exchange-traded funds never reached.
Ryan Rasmussen, head of research at Bitwise, agreed that the securities draw buyers who might avoid spot bitcoin ETFs. He still expects ETFs to be the larger source of demand over time, with perpetual preferred offerings acting as a second tailwind aimed at yield-seeking investors.
James Butterfill, head of research at CoinShares, pointed to the scale of one product. STRC, which pays a variable dividend currently near 12%, raised $7.5 billion in 2026 through late July. Butterfill noted that this money comes with a recurring dividend cost that must be met regardless of market conditions.
5. Why do the preferred shares not simply track bitcoin?
Alex Blume, founder and chief executive of the institutional bitcoin asset manager Two Prime, said STRC and Strive's SATA do not move with bitcoin alone. Their prices also reflect the quality of management, the obligations of the issuer and conditions in the capital markets.
He cited STRC dipping into the $70s in late June as evidence that these securities can be volatile. Strategy's preferred stock was trading at about $99.40 at the time of the report, a price below par that matters for the reasons discussed below.
Blume described a tension that issuers face among three goals: raising the amount of bitcoin per share, meeting dollar-denominated dividends and avoiding sales of bitcoin. Pursuing all three at once becomes harder when preferred shares trade below their issue price.
6. What happens when preferred shares trade below par?
Palmer described demand for perpetual preferreds as reflexive. Continued buying of bitcoin funded by these securities depends on the shares trading at or near par, the price at which they were first issued. Below par, new issuance becomes less attractive to the company because it must offer more dividend for each dollar it raises.
Butterfill said that in such conditions companies may prefer to repurchase their own preferred shares. His example was Strategy's latest weekly update, which reported $193 million spent on buying back STRC and only 267 BTC purchased. Strategy also lifted its authorization for preferred stock repurchases to $3 billion.
He explained the trade-off plainly. Buybacks can reduce future dividend costs, but they compete with bitcoin purchases for the same capital today. Cash reserves provide a buffer, though Strategy has already sold some bitcoin to fund dividends on its preferred stock, a step that runs against the accumulation story the company has told investors.
7. Do ETFs remain the bigger source of bitcoin demand?
By the scale of the numbers, yes. Butterfill said US spot bitcoin ETFs have drawn about $57 billion in cumulative net inflows and hold roughly $106 billion in assets. That compares with the $12 billion that Fidelity estimates for bitcoin-focused preferreds.
The mechanics also differ. When an ETF creates new shares, the fund adds bitcoin to its holdings, with no discretion left to a management team. Preferred issuance gives management a choice over how the proceeds are spent, whether on bitcoin, on buybacks or on dividends. ETF redemptions can reverse demand, but they leave no continuing dividend obligation behind.
Butterfill said preferreds tend to amplify the market cycle. They support bitcoin purchases when financing conditions are favorable, and that support weakens as sentiment sours and the shares slip below par.
8. Why do bitcoin treasury companies need outside funding?
A bitcoin treasury company holds the asset as a main reserve, and growing its holdings requires fresh capital. Unlike a fund that receives money from investors through creations, such a company must go to the market to raise cash, whether by selling common shares, issuing debt or offering preferred stock. Each route has a cost, and the choice shapes how exposed the company is to a fall in bitcoin's price.
Common shares dilute existing owners, and their appeal tends to depend on the premium the market is willing to pay over the value of the bitcoin held. Debt carries interest and a repayment date. Preferred stock sits between the two, which explains why it has become a favored tool for Strategy and Strive: it brings in cash without a maturity and without handing out votes.
The Fidelity figures show how far the approach has gone. More than 0.5% of all the bitcoin that will ever exist was bought with money raised in this way over 20 months, a pace that depends on a continuing supply of investors prepared to buy new issues.
9. Why do dividends limit what a company can do?
A dividend on a preferred share is not a legal debt in the way a bond coupon is, but companies are expected to pay it, and failing to do so damages their standing with the investors they need for the next offering. In practice it works like a fixed monthly or quarterly expense that grows with every new share sold.
That is the reason the analysts frame the issue as a balancing act. A company can raise more money by selling more preferred stock, but each sale raises its future payments, and those payments must be covered from cash on hand or from further fundraising. If neither is available, the only remaining source is the sale of assets, which for these firms means bitcoin.
The variable dividend on STRC, currently near 12%, shows how large the burden can become. On the $7.5 billion the product raised in 2026 through late July, a rate of that size implies a substantial annual outlay, which is why the question of coverage features so prominently in the analysts' comments.
10. What should investors watch next?
The weekly purchase and repurchase disclosures from Strategy are the most direct signal, because they show how the company divides cash between bitcoin and its own preferred shares. A run of weeks in which buybacks outweigh bitcoin purchases would indicate that the below-par pressure described by Palmer and Butterfill persists.
The price of STRC and similar securities relative to par is the second indicator. A recovery toward par would reopen the channel for new issuance, while continued weakness would keep the focus on dividend obligations. No new date or decision was announced in the research, so those readings are the markers that analysts are likely to follow.
Over a longer horizon, the debate is about whether preferred stock becomes a lasting pillar of bitcoin demand or a tool that works only while financing conditions stay friendly. The research quoted here leans toward the second reading for now: ETFs remain the larger channel, and preferreds add a complementary one that is more sensitive to price and sentiment.