MicroStrategy and Strive Buy 1,065 Bitcoin Below Cost

Corporate Bitcoin Giants Buy the Dip Again

Two major corporate treasury firms just bought more Bitcoin, even as market prices dropped below their average purchase costs.

Strategy (formerly MicroStrategy), led by Michael Saylor, and Strive recently added a combined total of 1,065 Bitcoin (BTCBTC-0.71%) to their balance sheets.

However, these recent purchases come at a challenging time. Bitcoin's spot price has fallen slightly below Strategy's average overall purchase price, placing their total stack temporarily under water.

Where Did Strategy's $283.8 Million Go?

Strategy raised a substantial amount of cash last week, but not all of it went directly into buying cryptocurrency.

According to filings with the U.S. Securities and Exchange Commission (SEC), Strategy raised $283.8 million between November 2 and November 8.

The company generated these funds by selling 2,051,348 shares of its common stock (MSTR) into the market.

Here is how Strategy split those proceeds:

• $81.9 million went toward acquiring 1,036 BTC at an average price of $79,012 per coin.
• $188.3 million was used to buy back approximately 1.89 million shares of its preferred stock, STRC.

This means Strategy spent significantly more money supporting its dividend-paying stock than it spent buying Bitcoin during that week.

Why Did Strategy Buy Back STRC Stock?

To understand this move, it helps to look at how STRC works.

STRC, nicknamed 'Stretch,' is Strategy's preferred stock designed to pay a monthly dividend and trade near a target price of $100 per share.

Strategy repurchased its preferred shares at an average price of $99.77 to keep the price stable. STRC recently closed at $99.84, holding close to that $100 target.

Meanwhile, common shareholders (MSTR) funded these moves through share issuance. MSTR stock closed at $128.93, down about 22% from its peak of $164.55 a month earlier.

Strategy's Bitcoin Stack and Paper Losses

With this latest addition, Strategy holds a total of 850,364 BTC.

Across all historical purchases, Strategy paid a total of $64.16 billion, giving it an average purchase cost of $75,456 per coin.

With Bitcoin trading near $74,876, Strategy's total holding sits roughly $490 million below its purchase cost. If Bitcoin drops to $74,270, the paper loss would reach $1 billion.

Past performance of digital assets is not an indicator of future results. You can view real-time market trends on Bitkub Market.

Has Strategy Been Underwater Before?

Unrealized paper losses are not new for Strategy or its executive chairman, Michael Saylor.

Back in August, Strategy's treasury was $4.69 billion underwater when Bitcoin dipped near $69,800. The market later recovered, moving back above their cost basis.

For comparison, on October 5, when Bitcoin traded above $86,000, Strategy held an unrealized paper gain of roughly $9.4 billion.

To cushion against market downturns, Strategy holds a $4.77 billion USD Reserve designed for preferred dividends and debt interest. The company drew $21.1 million from this reserve last week.

Strive Adds 29 Bitcoin to Its Reserve

Strategy was not the only corporate treasury making moves.

Strive (ASST), a Nasdaq-listed Bitcoin treasury firm co-founded by Vivek Ramaswamy, bought 29 BTC for $2.2 million.

Strive paid an average price of $75,721 per coin, bringing its total holdings to 43,153 BTC.

Like Strategy, Strive relies on selling corporate securities to fund its ongoing Bitcoin purchases.

What to Watch Next

Both companies remain committed to their treasury strategies, though market conditions require careful monitoring.

Strategy still has $18.34 billion available under its at-the-market (ATM) share offering program, along with $560.3 million remaining in its preferred stock buyback plan.

Upcoming regulatory filings will reveal whether Strategy continues selling MSTR shares to buy Bitcoin and maintain STRC target levels.