Strategy has decided to take a temporary break from its bitcoin acquisition program. In a statement made on Sunday, Michael Saylor announced that the company would not be adding to its bitcoin holdings this week, opting to pause its regular purchase schedule until after the release of its first-quarter earnings. Saylor stated, 'No buys this week.
Back to work next week,' indicating a brief hiatus in the company's bitcoin buying activities. This pause marks only the second time this year that Strategy, formerly known as MicroStrategy, has halted its weekly bitcoin purchases, with the previous pause occurring between March 23 and March 29.
Currently, the company holds a substantial 818,334 BTC, equivalent to nearly 3.9% of the total bitcoin supply of 21 million. Its most recent purchase added 3,273 BTC at an average price of $77,906 per bitcoin, with the current price of bitcoin trading near $80,100 in Asian morning hours on Monday, representing a 20% increase over the past month. The pause in bitcoin buying may seem insignificant, but it comes at a critical time, just ahead of the company's first-quarter results, which are expected to show a loss of $18.98 per share, according to some Wall Street analysts. Strategy is anticipated to report first-quarter revenue of approximately $125 million, based on data from six analysts on Yahoo Finance, marking a 12.6% increase from $111.1 million in the same quarter last year.
This growth suggests that the company's underlying software business is still performing well, despite the company's identity being heavily tied to bitcoin. However, earnings are expected to be lower, with an average estimate of a loss of $27.33 per share for the March quarter, according to Yahoo Finance, and a loss of $3.41 per share, according to Zacks Research data. The company's valuation is no longer based on its software business, but rather on its bitcoin financing operations, which provide business intelligence software as a secondary aspect.
As a result, Tuesday's earnings 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 pitched as a yield backed by Strategy's balance sheet and bitcoin-heavy capital strategy, but there are concerns that it may start to resemble credit risk rather than stable income if market sentiment turns. Higher bitcoin prices support Strategy's valuation, which improves its ability to raise capital and fund more bitcoin purchases.
However, when market sentiment weakens, the same structure becomes more fragile. Saylor has announced that bitcoin buying will resume next week, but Tuesday's earnings report will reveal how much confidence investors still have in the company's funding model.
Notably, the company raised $82 million through the sale of common stock, according to Monday's 8-K filing, but did not disclose any corresponding bitcoin purchases.