Strategy has decided to take a temporary break from its bitcoin purchasing program. In a recent statement, CEO Michael Saylor revealed that the company would refrain from adding to its bitcoin holdings this week, ahead of the release of its first-quarter earnings on Tuesday. Saylor took to X to announce the pause, stating 'No buys this week. Back to work next week.' This marks only the second time this year that Strategy, formerly known as MicroStrategy, has halted its regular weekly bitcoin purchases.
The company last suspended its buying activities during the week of March 23-29. Currently, Strategy holds an impressive 818,334 BTC, equivalent to nearly 3.9% of the total bitcoin supply. Its most recent purchase saw the acquisition of 3,273 BTC at an average price of $77,906 per bitcoin. As of Monday's Asian morning hours, BTC was trading at approximately $80,100, representing a 20% increase over the past month.
The temporary halt in bitcoin purchases may seem insignificant, but it comes at a time when Strategy is preparing to release its first-quarter results. Wall Street analysts are anticipating a loss of $18.98 per share, and the company is expected to report revenue of around $125 million, marking a 12.6% increase from the same quarter last year. However, earnings are expected to be lower, with estimates suggesting a loss of $27.33 per share for the March quarter. Strategy's valuation is no longer based on its software business, but rather on its ability to raise capital through its bitcoin financing vehicle.
As a result, the upcoming earnings report will likely be judged on the sustainability of Saylor's capital-raising strategy rather than the company's operating performance. One product that has drawn attention is STRC, a perpetual preferred share designed to trade near $100 while offering a variable monthly dividend of around 11.5% annualized. The product's pitch is centered around its yield, which is backed by Strategy's balance sheet and bitcoin-heavy capital strategy.
However, there are concerns that the product may start to resemble credit risk rather than stable income if market sentiment shifts. Higher bitcoin prices support Strategy's valuation, enabling the company to raise more capital and fund additional bitcoin purchases. Nevertheless, when market sentiment weakens, the same structure becomes more fragile.
Saylor has confirmed that bitcoin purchases will resume next week, but the upcoming earnings report will provide insight into the level of confidence investors still have in the company's capital-raising machinery. Notably, Strategy recently raised $82 million through the sale of common stock, as disclosed in Monday's 8-K filing, but no corresponding bitcoin purchases were announced.