Strategy has decided to take a temporary break from acquiring more bitcoin. In a statement made on Sunday, Michael Saylor announced that the company would not be adding to its bitcoin holdings this week, choosing instead to pause its regular purchase program until after the release of its first-quarter earnings on Tuesday. Saylor stated, 'No buys this week.
Back to work next week,' indicating a brief pause 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, Strategy holds an impressive 818,334 BTC, which is equivalent to nearly 3.9% of the total bitcoin supply of 21 million. The company's most recent purchase added 3,273 BTC to its holdings at an average price of $77,906 per bitcoin.
As of Monday morning in Asian hours, the price of BTC was trading near $80,100, representing a 20% increase over the past month. The decision to pause bitcoin purchases may seem insignificant, but it comes at a time when Strategy is preparing to release its first-quarter results, with some Wall Street analysts predicting a loss of $18.98 per share. According to data from Yahoo Finance, Strategy is expected to report revenue of approximately $125 million for the first quarter, which represents a 12.6% increase from the $111.1 million reported in the same quarter last year. However, earnings are expected to be lower, with Yahoo Finance estimating an average 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 significant 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 durability of Saylor's capital-raising strategy and less on the company's true operating performance. One product that has garnered 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 look less like stable income and more like credit risk if market sentiment turns.
Higher bitcoin prices support Strategy's valuation, which improves its ability to raise capital and funds more bitcoin purchases. However, when sentiment weakens, the same structure becomes more fragile.
Saylor has stated that bitcoin buying will resume next week, but Tuesday's earnings report will reveal how much confidence investors still have in the company's capital-raising machinery. Notably, the company raised $82 million through the sale of common stock, according to a recent 8-K filing, but did not disclose any corresponding bitcoin purchases.