Strategy has put its bitcoin buying on hold for the time being. In a recent statement, Michael Saylor announced that the company would not be adding to its bitcoin holdings this week, instead opting to pause its regular purchase program until after the release of its first-quarter earnings. This decision marks only the second time this year that Strategy has skipped a weekly bitcoin purchase, with the previous pause occurring between March 23 and March 29. The company currently holds an impressive 818,334 BTC, accounting for nearly 3.9% of the total bitcoin supply.
Its most recent purchase saw the addition of 3,273 BTC at an average price of $77,906 per bitcoin. As of Monday's Asian morning hours, BTC was trading near $80,100, representing a 20% increase over the past month.
The pause in bitcoin purchases may seem insignificant, but it comes at a crucial time, just ahead of Strategy's first-quarter results, which are expected to reveal a loss of $18.98 per share, according to some Wall Street analysts. In terms of revenue, Strategy is anticipated to report around $125 million for the first quarter, marking a 12.6% increase from the $111.1 million reported in the same quarter last year. This growth suggests that the company's underlying software business is still performing well, despite its identity being increasingly tied to bitcoin. However, earnings are expected to be lower, with estimates pointing to a loss of $27.33 per share for the March quarter.
Strategy is now primarily valued as a bitcoin financing vehicle, rather than a software company with a bitcoin position. As a result, the upcoming earnings report is likely to be judged on the durability 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 designed to trade near $100 while paying a variable monthly dividend, currently 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. The company's ability to raise capital is closely tied to the performance of bitcoin, with higher prices supporting Strategy's valuation and enabling it to raise more funds for bitcoin purchases.
Conversely, when sentiment weakens, the same structure becomes more fragile. Saylor has stated that bitcoin buying will resume next week, but the upcoming earnings report will be closely watched to gauge investor confidence in the company's funding model.
Notably, Strategy recently raised $82 million through the sale of common stock, although no corresponding bitcoin purchases were disclosed.