Strategy is momentarily suspending its bitcoin purchases. On Sunday, Michael Saylor announced that the company would not be adding to its bitcoin holdings this week, putting its regular purchase program on hold until after the release of its first-quarter earnings on Tuesday. Saylor stated, 'No buys this week.
Back to work next week.' This pause marks only the second time this year that Strategy, formerly known as MicroStrategy, has halted its weekly purchases, with the previous pause occurring between March 23 and March 29. Currently, Strategy holds 138,834 bitcoin, equivalent to nearly 3.9% of the total bitcoin supply.
The company's most recent purchase added 3,273 bitcoin at an average price of $77,906 per coin. As of Monday morning, bitcoin was trading near $80,100, representing a 20% increase over the past month. Although the pause may seem insignificant, it comes ahead of Strategy's first-quarter results, which are expected to show a loss of $18.98 per share, according to some Wall Street analysts.
The company is projected to report revenue of approximately $125 million for the first quarter, a 12.6% increase from the same period last year. However, earnings are expected to be lower, with an average estimate of a loss of $27.33 per share. Strategy's valuation is now heavily tied to its bitcoin holdings and financing vehicle, rather than its software business. As a result, Tuesday's report will likely be judged on the stability of Saylor's capital-raising strategy and the company's ability to raise funds to support its bitcoin purchases.
One product that has drawn attention is STRC, a perpetual preferred share that offers a variable monthly dividend, currently around 11.5% annualized. The product's pitch is yield backed by Strategy's balance sheet and bitcoin-heavy capital strategy, but there are concerns that it may start to look less like stable income and more like credit risk if market sentiment turns.
Higher bitcoin prices support Strategy's valuation, enabling it to raise capital and fund more bitcoin purchases. However, if sentiment weakens, the same structure becomes more fragile. Saylor has stated that buying will resume next week, but Tuesday's earnings will reveal how much confidence investors still have in the company's funding model.