Strategy, the biggest corporate Bitcoin holder in the world, stated that its third-quarter fair value gains were $3.9 billion. Strategy possesses approximately 640,000 Bitcoin, acquired at an average price of $73,983 each. With prices hovering around $124,500, the holdings are estimated to be worth roughly $78.7 billion, indicating unrealized gains of approximately $31.4 billion. “For every $10,000 change in BTC price, we generate $6 billion in unrealized gains on our BTC holdings,” stated Chaitanya Jain. The company has issued multiple types of preferred shares this year, aiming to secure additional funding beyond convertible debt and common stock. Three of these preferred share classes offer an annualized dividend rate of 10%.
Strategy revealed in an SEC filing that payouts on its STRC and STRD shares encompassed accrued interest, amounting to $22.4 million and $37.6 million for the quarter, respectively. On Monday, shares of Strategy climbed approximately 3% to about $364, marking a year-to-date increase of around 25% and hitting a peak of $450 in July. In a remarkable turn of events, Bitcoin has surged past short-term resistance last week, marking a “blue sky breakout” as bulls regained control, driving the price to an unprecedented weekly close of $123,515. In the absence of previous highs to inform resistance levels, technical analysis indicates possible obstacles at $131,000, $135,000, and $140,000. The company did not engage in any bitcoin purchases last week. The decision aligns with $140 million in dividend payments, representing the first instance of the company pausing Bitcoin accumulation since late July.
The halt in Bitcoin acquisitions aligns with a trend the company has adhered to in the past. This year, Strategy released three weekly updates during which it refrained from purchasing Bitcoin, with two of those updates coinciding with the conclusion of its first and second fiscal quarters. Last week’s announcement came at the end of the third quarter. During the weekend, Chairman Michael Saylor suggested that the company would pause its purchases, stating there would be “no new orange dots this week,” referring to the chart that tracks previous Bitcoin acquisitions. Michael Saylor envisions a strategy that aims to build a trillion-dollar Bitcoin balance sheet, leveraging it to revolutionize the global credit system. He anticipates that Bitcoin’s historical long-term appreciation, approximately 21% annually, will significantly enhance the firm’s capital stock. Saylor suggests the issuance of Bitcoin-backed credit that offers yields surpassing those of conventional fiat debt, thereby establishing a dual flywheel that enhances collateral and broadens digital credit markets.
He forecasts that with the adoption of Bitcoin by corporations, banks, and sovereign funds, traditional financial instruments and equity indexes will transform into indirect vehicles for Bitcoin, reaping the rewards of its compounding growth. Ultimately, he views Bitcoin treasury companies as pivotal to a transformative financial framework, facilitating higher-yield savings, Bitcoin-centric money markets, innovative insurance models, and widespread acceptance by major tech players.