Strategy, Strive face balancing act between bitcoin buying and preferred stock dividends
Securities like Strategy (MSTR) and Strive (ASST) have financed purchases of nearly 136,000 bitcoin through preferred stock dividends, opening a funding channel that analysts expect to complement the larger ETF market.
Intelligence analysis by Qwen 2.5 (3B)
Securities like Strategy and Strive have financed bitcoin purchases through preferred stock dividends, creating a funding channel that analysts expect to complement the larger ETF market.
Companies like Strategy and Strive use special stocks called preferred stocks to buy lots of Bitcoin. These stocks pay out money to the investors, like a dividend. This helps keep people interested in buying Bitcoin, even though they can't own it directly. The companies can also buy back some of their own preferred stocks if they need to.
Analysis
{"
Fidelity's Perspective on Preferred Stock Dividends and Bitcoin Purchases":"Fidelity Digital Assets' research analyst Zack Wainwright wrote in a Tuesday report that since 2025, preferred stocks have financed purchases of 135,979 BTC through Oct. 5, according to Fidelity. This shows the significant role preferred stock dividends play in the crypto market. The analyst also noted that the number of shares in circulation has grown, leading to higher dividend payments. The securities, which sit between debt and common equity in the capital structure with regular payouts and no voting rights, have financed purchases of some 136,000 bitcoin in the 20 months since their introduction. This indicates that preferred stock dividends have become a viable and attractive option for investors seeking income and diversification in the crypto market.","
StoneX's View on Perpetual Preferreds and Yield Investors":"StoneX's senior equity research analyst Mark Palmer sees perpetual preferreds as a way to bring bitcoin to income investors, a group that ETFs never reached. He believes that perpetual preferreds have brought bitcoin to yield investors, which is a significant advantage for the market. The analyst also notes that the products attract buyers who might avoid bitcoin exchange-traded funds (ETFs) due to their direct ownership of the asset.","
Bitwise's Outlook on ETFs and Preferred Stock Dividends":"Bitwise's head of research Ryan Rasmussen expects ETFs to remain the bigger demand channel for bitcoin, with perpetual preferred offerings acting as a second tailwind addressing a different type of investor (yield investors). He believes that ETFs will continue to be the primary source of demand for bitcoin, while preferred stock dividends will complement this demand. The analyst also notes that the ETFs' demand will increase funds' bitcoin holdings, while the issuance of preferred stock gives management discretion over spending. However, he also acknowledges that redemptions can reverse ETF demand but leave no continuing dividend commitment."}
Key points
- Preferred stock dividends have financed purchases of nearly 136,000 Bitcoin in the last 20 months.
- ETFs are expected to remain the larger demand source for Bitcoin, with preferred stock dividends acting as a second tailwind.
- The growth of preferred stock dividends can help keep the demand for Bitcoin strong, even as ETFs continue to be the main source of demand.
The growth of preferred stock dividends can help keep the demand for Bitcoin strong, even as ETFs continue to be the main source of demand. This can lead to more Bitcoin being bought and sold, which can affect the price of Bitcoin.
If the preferred stock dividends become too expensive for the companies to pay, they might not be able to buy as much Bitcoin. This could lead to a decrease in the demand for Bitcoin, which could affect its price and value.
