Strategy is temporarily 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 purchases this week. We will resume next week." This pause marks only the second time this year that Strategy, previously 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 roughly 0.66% of the total bitcoin supply of 21 million. 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, with some analysts expecting a loss of $18.98 per share. According to data from six analysts on Yahoo Finance, Strategy is expected to report first-quarter revenue of approximately $125 million, a 12.6% increase from $111.1 million in the same quarter last year. This would indicate an improvement from the same quarter last year when sales declined 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.
Yahoo Finance's average estimate is 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 resilience of Saylor's capital-raising strategy and less on the company's 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 of 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.