Strategy is temporarily suspending its bitcoin purchasing program. 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 purchases this week. We'll resume next week." This pause marks only the second time this year that Strategy, formerly known as MicroStrategy, has halted its weekly purchases.
The company had previously skipped a purchase during the week of March 23-29. Currently, Strategy holds 138,834 bitcoin, which is approximately 0.66% of the total bitcoin supply.
Its most recent purchase added 3,273 bitcoin at an average price of $77,906 per bitcoin. 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 expected to report first-quarter revenue of around $125 million, based on data from six analysts on Yahoo Finance, representing a 12.6% increase from $111.1 million in the same quarter last year.
This would be an improvement from the previous year, when sales declined by 3.6%, suggesting that the underlying software business is still growing, despite the company's identity being closely tied to bitcoin. However, earnings are expected to be lower, with Yahoo Finance showing an average estimate of a loss of $27.33 per share for the March quarter, while Zacks Research data points to an expected loss of $3.41 per share. Strategy is no longer viewed as a software company with a bitcoin position, but rather as a bitcoin financing vehicle that also provides business intelligence software.
As a result, Tuesday's report may be judged more on the sustainability of Saylor's capital-raising strategy and less on the company's true operating performance. One product that has drawn attention is STRC, a perpetual preferred share designed to trade near $100 while paying a variable monthly dividend, currently around 11.5% annualized. The product is marketed as a yield backed by Strategy's balance sheet and bitcoin-heavy capital strategy.
However, there is a concern that it may start to resemble credit risk rather than stable income if market sentiment shifts. Higher bitcoin prices support Strategy's valuation, enhancing its ability to raise capital and fund more bitcoin purchases. Nevertheless, when 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 machinery that makes this possible.