Last week, Strategy overtook BlackRock, issuer of the world’s largest bitcoin exchange-traded fund, IBIT, to become the world’s largest institutional holder of bitcoin. The milestone followed yet another enormous purchase: between April 13 and April 19, according to a recent Securities and Exchange Commission filing, Strategy bought $2.54 billion worth of bitcoin, its largest acquisition since November 2024. The purchase brought the company’s total holdings to 815,061 BTC—about 3.88% of bitcoin’s fixed 21 million supply—currently worth around $65 billion. The only larger holder is thought to be Satoshi Nakamoto, the elusive founder of the cryptocurrency who disappeared 15 years ago.
The funding for Strategy’s latest bitcoin buying spree is not coming from flooding the market with common shares or convertible debt, but mainly from what traders affectionately call “Stretch,” a high-yield perpetual preferred stock the company has been issuing under the symbol STRC. Saylor, Strategy’s chairman, has been touting Stretch as the critical underpinning of the next phase of his bitcoin empire.
From 2020 through 2024, Strategy financed its bitcoin binge largely by selling convertible notes and issuing common stock. It was a shrewd display of financial engineering while it lasted. As bitcoin climbed and investors bid Strategy shares to eye-popping premiums over the value of the company’s underlying bitcoin, Saylor could keep issuing more bonds convertible into stock and selling common shares to hedge funds and other investors anticipating a windfall. At points, the stock traded at two to three times the value of bitcoin on its balance sheet.
But that model began to hit a wall when bitcoin started falling in early 2025. Convertible buyers wanted downside protection and income. Common shareholders faced massive dilution. Then the stock premium began to vanish. But Saylor wanted more bitcoin.
So in 2025, Strategy broadened its financing arsenal, introducing a series of preferred-stock offerings that Saylor, with characteristic flourish, packaged as “digital credit,” emphasizing steady income. STRC soon emerged as the flagship product. Launched last July at a price of $90 with a 9% coupon, it was designed to trade at $100 par value while paying a monthly dividend. The structure is meant to be self-correcting: if the shares fall too far below par, Strategy can sweeten the dividend to draw buyers back in; if they rise above $100, the company can issue more preferred stock through an at-the-market program, adding supply and capping the price. The genius was convincing investors that STRC offered a safe way to buy bitcoin, even though the preferred shares have no direct claim on the bitcoin hoard Strategy has been adding to with the proceeds. STRC currently yields 11.5% and its price, currently at $99.59, has dipped below $95 only three times in the past nine months.
Note: Data based on Bloomberg screen of global exchange-listed preferreds as of April 20, 2026. Excludes mandatory convertible preferred stock and issuances without a quoted price. Market cap calculated as preferred shares outstanding multiplied by bid price as reported by Bloomberg. Preferreds that trade in foreign denomination converted to USD.
Strategy
Saylor calls Stretch his company’s “iPhone moment,” arguing that if the preferred remains stable and liquid, it could unlock a much larger pool of capital than any of Strategy’s previous instruments. “If Stretch actually hits its par and it trades with low volatility,” he told analysts, “you could, in theory, sell a hundred billion dollars of it.”
Since its $2.5 billion IPO, STRC’s market capitalization has swelled to $8.5 billion, surpassing the combined value of Strategy’s three other preferred securities. Its trading volume now equals roughly 20% of MSTR’s already massive daily trading volume, according to BitcoinTreasuries.net. On April 13 alone, more than $1.1 billion of STRC traded hands, dwarfing the average daily volume of preferred issues from the likes of JPMorgan and Wells Fargo, which rarely exceed $20 million in daily volume. In fact, STRC is now the world’s largest preferred equity by market capitalization, nearly twice the size of Wells Fargo’s Preferred Shares Series L ($4.7 billion) and well above Bank of America’s Non-Cumulative Perpetual Convertible Preferred Stock Series L ($3.7 billion).
It has already become the anchor of Strategy’s capital-raising strategy, according to Mark Palmer, senior equity research analyst at Benchmark-StoneX.
It’s no surprise that retail buyers are gobbling up Stretch, not only because the preferred shares are gushing yields higher than junk bonds, but also because Saylor is marketing them as tax-deferred, since STRC dividends are treated as a return of capital.
“It’s a very simple instrument. Think about it as how you might get paid on a money market,” said Phong Le, Strategy’s president and CEO, on a recent episode of the Coin Stories podcast. “I like the monthly payout because it almost looks like a paycheck.”
Money market funds currently yield less than 4%, but are typically backed by Treasury bills and other high-quality, low-risk assets. Saylor’s hot preferreds have no maturity date and no voting rights, and in the event of a bankruptcy, their claims on Strategy’s assets would be subordinated to those of the holders of the company’s $8.3 billion in debt.
With bitcoin down 16% over the last year, how is Saylor able to afford some $85 million in cash dividends that Strategy now pays monthly to Stretch holders without selling bitcoin?
“The yield comes from us issuing shares typically into the market,” Le said. “On the back-end, what we are doing is [issuing] MSTR, our common, the highest liquidity stock in the market. We are issuing shares and we are using those proceeds to basically pay off our dividends.”
In fact, Strategy’s primary preoccupation, outside of buying bitcoin, is issuing securities on a weekly basis. From April 1 through April 19, according to SEC filings, the company issued nearly 33 million new Stretch preferred shares, raising close to $3.3 billion. During that same period it also issued more than 2.7 million common shares, bringing in another $438 million.
If the practice of paying returns to existing investors with money raised from other investors sounds like a Ponzi scheme, rest assured it’s all perfectly legal and transparent – even if its brazen simplicity would likely have made the late Bernie Madoff jealous.
Stretch preferreds provide fresh capital but, unlike straight debt, represent little liquidity risk because Saylor can reduce the dividend payout if necessary. Also, every dollar he raises through the issuance of Stretch or other preferred shares can be used to buy more bitcoin without increasing the common share count as much as it would if Strategy financed those purchases with straight equity or convertible notes. That helps support another much-watched Saylor invention, “BTC Yield”—bitcoin per diluted share, which he currently touts at 9.5%.
Note: As of April 24, 2026, 12:26 PM EDT
YCHARTS
The flurry of recent preferred stock offerings, together with ongoing common-stock issuance, forms part of Strategy’s “42/42” plan to raise $84 billion for more bitcoin purchases through 2027. Strategy still has $8.2 billion of convertible debt outstanding, but over the next several years it aims to tilt the balance sheet more heavily toward perpetual preferred stock. For Saylor devotees, the plan appears flawless.
“Perpetual preferred stock has no maturity date. It has no covenants, no triggers associated with the price of bitcoin, and as such, is effectively the equivalent of permanent capital, unlike convertible bonds,” says Benchmark’s Palmer. “For a company that is focused on acquiring a volatile commodity like bitcoin, I cannot imagine a better instrument to use.”
One new group of supporters of Saylor’s latest balance-sheet expansion plan is financial advisors seeking income products for wealthy clients. “80% of our clients are exposed to STRC and Strategy’s stock itself. We actually tend to use STRC a lot more than the common stock,” says Morgen Rochard, founder of Austin-based Origin Wealth Advisers and wife of a longtime bitcoin bull who serves on the board of bitcoin holding company Strive. “You can’t get a whole lot by holding a bond portfolio where you’re just yielding about 4%. You have to have significantly more capital in order to retire if you’re going to be living only off the income from short-term bonds. So what we’ve been helping clients do with these is use them as yield enhancement.”
Mutual fund and ETF managers are buying as well. Stretch is now the third-largest holding in BlackRock’s iShares Preferred and Income Securities ETF, with an allocation of roughly $344 million. VanEck, Fidelity, and American Funds are also among the biggest holders of the new preferred stock. In February 2026, Swiss asset manager 21Shares listed the Strategy Yield ETP on Euronext Amsterdam, giving European investors exchange-traded exposure to Stretch’s floating yield. A month later, Strive and ETF issuer Tuttle Capital Management filed for a fund that would hold STRC.
Strategy copycat companies—of which there are hundreds known as digital asset treasuries (DATs)—are also buying Stretch preferred stock, likely to boost the sagging returns they have had buying bitcoin recently. OranjeBTC, the largest DAT in Latin America, recently invested $10 million of its $292 million bitcoin treasury in Stretch. Vivek Ramaswamy’s Strive has put $50 million of its own treasury into STRC and created a similar preferred stock, SATA, offering yields around 13%. It has reached a market capitalization of roughly $1.1 billion. There is even a stablecoin linked to Stretch that accounts for $150 million of the preferred’s market cap.
“Other people look at Stretch and see some crazy, risky bitcoin thing, but we see a very durable dividend that is supported by a large balance sheet, a liquidity profile that we need for our working capital needs, and it’s earning four times more than what we would have earned in a money market fund,” says Sam Callahan, director of bitcoin strategy and research at OranjeBTC.
With interest rates relatively low, and possibly declining under a new Federal Reserve chairman, Saylor’s mastery in turning the pixie dust of bitcoin into a steady high-income vehicle with the appearance of suitability for financial advisors and their retail clients seems unstoppable.
All told, Strategy faces more than $1.2 billion a year in interest and preferred dividend obligations. This is a sizable and growing nut when one considers that Strategy’s only real operating business, software, generates a mere $477 million in annual revenue. The company also reported more than $5 billion in losses on its bitcoin in 2025.
Still, given that its bitcoin holdings amount to more than $60 billion, it would take a devastating crypto catastrophe for Strategy’s debt holders to suffer. As for its preferred stock holders, who have no direct claim to Strategy’s bitcoin holdings, there is real risk that Stretch could one day “break the buck” and fall precipitously from its $100 par value, especially if Saylor is forced to begin cutting its 11.5% dividend. Right now that appears to depend heavily on attracting a continuous stream of buyers for Strategy’s beleaguered common stock, which is down more than 50% over the last 12 months.
Unworried, Saylor recently announced that he intends to make Stretch even more irresistible to retail investors. On April 17, Strategy proposed changing STRC’s dividend payments from once a month to twice per month, much like a paycheck. If approved at its annual meeting on June 8, STRC would become the only semi-monthly dividend-paying preferred in the market. The new twice-monthly Stretch payments would be awarded to holders of record as of June 30, with the first payment expected on July 15.
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