Bitcoin’s Rally Is Being Supercharged By Strategy, According To Bitwise

If Strategy keeps buying at its current pace, it could surpass Bitcoin’s pseudonymous creator Satoshi Nakamoto as the largest single holder of the cryptocurrency within two years.

That projection, from Galaxy Digital research head Alex Thorn, puts into sharp focus just how much one company has come to shape the crypto market.

A Preferred Stock Is Funding The Buying

Strategy — the treasury firm led by Michael Saylor — has poured $7.2 billion into Bitcoin over the past eight weeks, according to Bitwise chief investment officer Matt Hougan.

He called it the “single biggest factor” behind Bitcoin’s climb of roughly 20% from its February low of $62,820. As of Wednesday, Bitcoin was trading near $76,550.

The fuel behind those purchases is STRC, Strategy’s perpetual preferred stock. The company issues STRC shares and channels most of the money raised directly into Bitcoin.

Investors are drawn to it partly because it offers an 11.5% annual yield — well above what junk bonds are currently paying.

Hougan said that with private credit losing favor among investors, STRC’s yield backed by a Bitcoin reserve worth more than $40 billion looks attractive. He expects Strategy to raise billions more through the instrument.

Strategy’s Bitcoin buys have become a weekly occurrence. Its latest purchase — 3,273 coins for $255 million between April 20 and 26 — pushed its total holdings to 818,334 BTC, edging past BlackRock’s roughly 812,300 coins held on behalf of its clients.

Dividend Payments Could Last Decades

Hougan ran the numbers on how long Strategy could sustain its dividend commitments. At current Bitcoin prices, the company could theoretically keep paying existing dividends for 42 years.

If Bitcoin grows at 20% annually, Saylor has argued, those payments could continue indefinitely. Hougan appears to share that view, saying the purchases are likely to continue “for some time to come.”

ETFs and large individual buyers have also played a role in the recovery. ETF inflows have reached $3.8 billion since March 1, and long-term holders have resumed buying. But Hougan was clear that Strategy’s consistent, large-scale purchases have outweighed those other factors combined.

Wallets attributed to Nakamoto hold a little over a billion Bitcoin — about 5.5% of the total supply. Strategy would need to acquire roughly 277,660 more coins to match that figure.

Its weekly purchases have ranged widely this year, from as few as 850 coins in February to 34,160 on a single day in April, so the timeline depends heavily on how aggressively the company continues buying.

Featured image from MetaAI, chart from TradingView