MicroStrategy Buys $250M in Bitcoin, Calling the Crypto ‘Superior to Cash’

[Popkon6]

MicroStrategy CEO Michael Saylor purchased 855 Bitcoins during this deep market correction.  However, Michael Saylor's company purchased 855 bitcoins for over $87,000 per bitcoin with $75 million.55.

It is not surprising that at this time of falling prices, Strategy's access to liquidity is very limited. The approximately $100 million raised comes exclusively from MSTR's ATM.

The other thing to note is that, as I predicted, STRC's dividend is rising again, this time to 11.25%. I don't know if they taught Saylor this at MIT, but at my school, raising the dividend more and more while the asset you rely on to pay it hasn't yielded even 0% to you would be a failing grade in math.

Strategy raises STRC dividend as the preferred stock's price drifts below par
The dividend increase follows renewed pressure on STRC, which has been trading below its $100 par value.
Strategy increased the February dividend on its perpetual preferred stock Stretch (STRC) by 25 basis points to 11.25%.
The move comes as STRC trades below par at $98.99 and bitcoin dipped below Strategy’s cost basis before rebounding.
Source link: https://www.coindesk.com/markets/2026/02/01/strategy-raises-strc-dividend-as-the-preferred-stock-s-price-drifts-below-par

The preferred stock STRC is currently holding MSTR Company very strongly, if I may say STRC is currently holding the strongest. And the transaction is playing the right role to carry out properly, although MSTR Company has only bought 855 Bitcoins this week. At the moment during this Dip and MSTR ATM price is dumping properly, STRC ATM has given a lot of benefits and they have increased the dividend.

[Ambatman]

Yes, I know that. But the fundamental question I have about dividend payments, especially those from STRC, is that they are paid based on an average Bitcoin price growth of 30%, and:

From what I could recall I don't think STRC dividends are based on price appreciation or volatility
The rate is adjusted to be around $100 par value
And if STRC falls due to market sentiment they raise rate
And if rise they reduce it.
It's more like attracting investors that would appreciate relative stability that isn't directly influenced by Bitcoin.

The advantage for them is even if Bitcoin is falling it would still look attractive to investors (as long as confidence doesn't die)
Thereby generating funds so they can buy during dips.

[Free Market Capitalist]

The preferred stock STRC is currently holding MSTR Company very strongly, if I may say STRC is currently holding the strongest.

Not really. STRC market cap is a bit more than $3B. MSTR market cap is $46,5B. The strongest is the common stock, MSTR.

From what I could recall I don't think STRC dividends are based on price appreciation or volatility
The rate is adjusted to be around $100 par value
And if STRC falls due to market sentiment they raise rate
And if rise they reduce it.
It's more like attracting investors that would appreciate relative stability that isn't directly influenced by Bitcoin.

The advantage for them is even if Bitcoin is falling it would still look attractive to investors (as long as confidence doesn't die)
Thereby generating funds so they can buy during dips.

I've explained it several times, in several threads already, and people don't seem to get it. Yes, the mechanism is clear: if the price of STRC is below $100, they raise the dividend so that demand rises and then the price rises as well. The problem with STRC is what the dividend is based on, and today it is based on nothing, since the return on the asset on which it is supposed to be based is 0% for Strategy.

At this rate, if we have a bad year for the price of Bitcoin, Strategy will have a -20% return on its Bitcoin and will pay a 20% dividend.

It is basically a junk preferred stock.

[Alpen]

Can someone please explain this to me? For five years, Michael Saylor has been borrowing money by issuing zero-coupon bonds just to pour it all into Bitcoin. As of today, Bitcoin’s profit is effectively zero.

What is the point of this business model? Who is buying these bonds and why? And more importantly, what happens when MicroStrategy is forced to sell Bitcoin to pay off its debts?

[Free Market Capitalist]

Can someone please explain this to me? For five years, Michael Saylor has been borrowing money by issuing zero-coupon bonds just to pour it all into Bitcoin. As of today, Bitcoin’s profit is effectively zero.

Those coupons, or convertible debt, is what they used to issue but they are not issuing any more, although obligations come due in between 2028 and 2032.

What is the point of this business model?

The point of those bonds is that they are convertible to common stock shares when the shares reach a certain price.

Who is buying these bonds and why?

Those who bought them believed that the share price would continue growing so they would have a good profit when converted.

And more importantly, what happens when MicroStrategy is forced to sell Bitcoin to pay off its debts?

The way the company is structured, it is extremely unlikely that they will be forced to sell Bitcoin to pay the convertible notes if at the time they haven't reached the convertible price.

[JayJuanGee]

Can someone please explain this to me? For five years, Michael Saylor has been borrowing money by issuing zero-coupon bonds just to pour it all into Bitcoin. As of today, Bitcoin’s profit is effectively zero.

What is the point of this business model? Who is buying these bonds and why? And more importantly, what happens when MicroStrategy is forced to sell Bitcoin to pay off its debts?

There is not really as much of a stupendous downside to MSTR as you seem to be implying.

MSTR started in mid-2020 (so 5.5 years ago) mostly just using it's own money to buy bitcoin, yet it did not take them very long to figure out a variety of creative ways to use other people's money and to buy bitcoin, and sure there are some encumbrances on some of their bitcoin, yet overall their level of encumbrances are not as high as many folks want to presume.

They use other people's money to accumulated bitcoin, and so now they have more than 700k bitcoin.  I have difficulties understanding how MSTR and/or Saylor is in a bad place, even if the BTC price goes way below their average costs per BTC... .. and they don't necessarily need to sell any BTC at lower prices, even if they might not be able to raise money to buy more bitcoin.

There are likely several of us who have been watching aspects of MSTR over the years, and maybe seen that they had gravitated towards more and more risky products - in regards to creating demands on their cashflows, so I would not necessarily put it past them to screw something up or even to screw up their custody and contribute towards increase in the lack of confidence in the bitcoin market based on concerns about various MSTR paper products, and so yeah, there could be some further negative cascading effects, and surely there are other powers that be that are likely dumping other paper bitcoin products to drive the BTC price down, so there can be cross over effects from various aspects of the market that ends up negatively affecting the price, and surely many of us bitcoin holders would prefer that the paper bitcoin holders were to get wrecked by being on the opposite side of a BTC price pump - even though surely, sometimes, it seems difficult to fight downward momentum in the BTC price and/or to figure out whan the bottom is actually in.

Sure there is a feeling that MSTR is leveraging way too much on bitcoin's price going up, which likely further and further incentivizes other players to try to seek price points to cause MSTR to break... and so far they have just kept buying BTC.. .. so if there might be naked shorting going on, we could end up with situations in which more violence occurs (in regards to the price), and I am surely not going to claim to have any answers, since I had thought that the odds were pretty low that the BTC price would even go below $74.5k (our April 2025 low).  Yet, here we are.

Are you, Alpen, of the view that MSTR is put into some vulnerable position merely because the BTC spot price is below its purchase price?  

That has been a superficial theory (and even a lame theory) that has been batted around these parts quite a bit, even similar theories in the 2022 price correction period.. at that time MSTR's costs per BTC were north of $30k, and so folks considered they would be liquidated at various price points and/or bad things would start to happen to them, which largely did not happen, even though it seems that they did slow down a bit in their buying for several months while the BTC price was below $20k, and of course any of us observing likely realize that the price was above and below $20k for quite a long period of time between June 2022 and December 2022, including getting down to $15,479 at one point in November 2022... and the BTC price even had another revisiting of sub $20k in March 2023... so for sure those were not easy times for bitcoin and/or for MSTR - even though they did not sell any of their BTC during that time.

[ultrloa]

Can someone please explain this to me? For five years, Michael Saylor has been borrowing money by issuing zero-coupon bonds just to pour it all into Bitcoin. As of today, Bitcoin’s profit is effectively zero.

What is the point of this business model? Who is buying these bonds and why? And more importantly, what happens when MicroStrategy is forced to sell Bitcoin to pay off its debts?

There is not really as much of a stupendous downside to MSTR as you seem to be implying.

MSTR started in mid-2020 (so 5.5 years ago) mostly just using it's own money to buy bitcoin, yet it did not take them very long to figure out a variety of creative ways to use other people's money and to buy bitcoin, and sure there are some encumbrances on some of their bitcoin, yet overall their level of encumbrances are not as high as many folks want to presume.

They use other people's money to accumulated bitcoin, and so now they have more than 700k bitcoin.  I have difficulties understanding how MSTR and/or Saylor is in a bad place, even if the BTC price goes way below their average costs per BTC... .. and they don't necessarily need to sell any BTC at lower prices, even if they might not be able to raise money to buy more bitcoin.

There are likely several of us who have been watching aspects of MSTR over the years, and maybe seen that they had gravitated towards more and more risky products - in regards to creating demands on their cashflows, so I would not necessarily put it past them to screw something up or even to screw up their custody and contribute towards increase in the lack of confidence in the bitcoin market based on concerns about various MSTR paper products, and so yeah, there could be some further negative cascading effects, and surely there are other powers that be that are likely dumping other paper bitcoin products to drive the BTC price down, so there can be cross over effects from various aspects of the market that ends up negatively affecting the price, and surely many of us bitcoin holders would prefer that the paper bitcoin holders were to get wrecked by being on the opposite side of a BTC price pump - even though surely, sometimes, it seems difficult to fight downward momentum in the BTC price and/or to figure out whan the bottom is actually in.

Sure there is a feeling that MSTR is leveraging way too much on bitcoin's price going up, which likely further and further incentivizes other players to try to seek price points to cause MSTR to break... and so far they have just kept buying BTC.. .. so if there might be naked shorting going on, we could end up with situations in which more violence occurs (in regards to the price), and I am surely not going to claim to have any answers, since I had thought that the odds were pretty low that the BTC price would even go below $74.5k (our April 2025 low).  Yet, here we are.

Are you, Alpen, of the view that MSTR is put into some vulnerable position merely because the BTC spot price is below its purchase price?  

That has been a superficial theory (and even a lame theory) that has been batted around these parts quite a bit, even similar theories in the 2022 price correction period.. at that time MSTR's costs per BTC were north of $30k, and so folks considered they would be liquidated at various price points and/or bad things would start to happen to them, which largely did not happen, even though it seems that they did slow down a bit in their buying for several months while the BTC price was below $20k, and of course any of us observing likely realize that the price was above and below $20k for quite a long period of time between June 2022 and December 2022, including getting down to $15,479 at one point in November 2022... and the BTC price even had another revisiting of sub $20k in March 2023... so for sure those were not easy times for bitcoin and/or for MSTR - even though they did not sell any of their BTC during that time.

Maybe because they are afraid on current status that's why they think negatively on MSTR, but until they didn't liquidated their asset we cannot say they are in bad shape. Since they are always go for long term, then not selling anything when Bitcoin price dips. Strategy didn't get panic in this situation. They exist for long time and face more heavier bearish run, but what they only do is to paused and just continue to buy when condition of Bitcoin improve.

The current situation like Bitcoin is not the real risk on their position, but their other obligations and debt structures might push them on corners. Also as long as they can avoid having mistakes and try to force liquidations they can still hold those $700k BTC that they own whatever price Bitcoin reached.

That collapse of MSTR under their cost is not really a big issue, since what we need to look up is on how they manage those external pressure and their leverages.

[Ambatman]

The current situation like Bitcoin is not the real risk on their position, but their other obligations and debt structures might push them on corners. Also as long as they can avoid having mistakes and try to force liquidations they can still hold those $700k BTC that they own whatever price Bitcoin reached.

That collapse of MSTR under their cost is not really a big issue, since what we need to look up is on how they manage those external pressure and their leverages.

They are not liquidating
Their Bitcoins are held as spot not futures
It's just people spreading FUD that Strategy would liquidate if Bitcoin goes below their average purchase price.

MSTR under their cost is not really a big issue, since what we need to look up is on how they manage those external pressure and their leverages.

MSTR have little or nothing to do if Bitcoin is falling
Because their core and people's perception about their values is tied to Bitcoin price and how it's performing.

[JayJuanGee]

The current situation like Bitcoin is not the real risk on their position, but their other obligations and debt structures might push them on corners. Also as long as they can avoid having mistakes and try to force liquidations they can still hold those $700k BTC that they own whatever price Bitcoin reached.
That collapse of MSTR under their cost is not really a big issue, since what we need to look up is on how they manage those external pressure and their leverages.

They are not liquidating
Their Bitcoins are held as spot not futures
It's just people spreading FUD that Strategy would liquidate if Bitcoin goes below their average purchase price.

MSTR under their cost is not really a big issue, since what we need to look up is on how they manage those external pressure and their leverages.

MSTR have little or nothing to do if Bitcoin is falling
Because their core and people's perception about their values is tied to Bitcoin price and how it's performing.

You seem to be correct Ambatman... The issue is that people exaggerating MSTR's vulnerabilities, and sure it is possible that certain extra vulnerabilities exist, yet the mere passing of the BTC price below their costs, and even if it were 50% below their costs (like in the $35k prices) that still would not be enough by itself to break MSTR, even though maybe we could anticipate that MSTR would not be receiving as much (maybe really low) capital inflows or willingness of others to fund them, even though MSTR does not seek willingness since they can choose to print their own shares or engage in other kinds of manipulation of their various financial products that might result in cash for them to potentially buy more bitcoin or whatever they might choose to do with the cash.

[Free Market Capitalist]

There is not really as much of a stupendous downside to MSTR as you seem to be implying.

Yes, what Alpen says shows that he is someone who has heard a few things about Strategy, but doesn't know the company very well.

They use other people's money to accumulated bitcoin, and so now they have more than 700k bitcoin.  I have difficulties understanding how MSTR and/or Saylor is in a bad place, even if the BTC price goes way below their average costs per BTC... .. and they don't necessarily need to sell any BTC at lower prices, even if they might not be able to raise money to buy more bitcoin.

I would like to distinguish between two things here. What you say is absolutely correct. The company has structured its obligations in such a way that it will not need to sell either to pay dividends, for which it has set up a cash reserve of two and a half years, or to pay the convertible debt, which is due for its first payment in 2028, and from then on has annual payments until 2032 if the MSTR share price does not reach the conversion price.

That is very well structured; it is intelligent leverage, as Saylor says.

But what I see is a questioning of the business model, which will first put at risk the more than a hundred copycat companies that started doing the same thing last year.

And specifically in terms of Strategy, I have already said that preferred shares are basically junk preferred shares because they pay a dividend that is not supported by the profitability of the underlying asset. It is not now, nor would it be supported in a bullish scenario due to the reverse DCA it performs, which results in a much lower return on the asset.

And as for common stock, MSTR, even when we return to a bullish scenario, I don't see it returning to crazy mNAV in the future. In other words, we have to consider that if MSTR currently had a mNAV of 1.5, which is moderately low, anyone buying the stock would have to wait until Strategy had purchased another 356,000 bitcoins in order to match the bitcoin exposure they would have if they simply bought bitcoin today.

Today Strategy will present its Q4 2025 results. With billions in losses (unrealized, but with accounting rules previously presenting unrealized gains as gains, meaning that now it's the opposite). We'll see how they sell it.

[Wind_FURY]

Strategy's earnings call will be today after the U.S. markets close. I believe that it's going to be very bad, which will cause a mini-crash for MSTR during post-market trading.

Although next year could be good for Chad Saylor when Bitcoin starts surging again. But the Four-Year-Cycle will need to happen/find the market bottom probably in Q4, 2026.

[Ambatman]

Strategy's earnings call will be today after the U.S. markets close. I believe that it's going to be very bad, which will cause a mini-crash for MSTR during post-market trading.

Although next year could be good for Chad Saylor when Bitcoin starts surging again. But the Four-Year-Cycle will need to happen/find the market bottom probably in Q4, 2026.

Like worse than this?
They are below $111 and I thought the news was already priced in
But I guessed Bitcoin dip impact is that big.
This winter would differentiate true treasury companies from wannabes

When I saw Bitcoin price I didnt know whether to cry or laugh
Cry because I'm still holding and saw quite some unrealized profit last year
And laugh because it got cheaper and I can start my DCA.
Once Saylor buys next week I might add Mstr to my portfolio
I'm curious if it's options would help generate funds or other means.

[Alpen]

The core issue with MicroStrategy is that it pioneered a new category of DAT (Digital Asset Treasury) companies. By constantly accumulating Bitcoin through equity dilution and bond issuance, they’ve turned their securities into a form of collateral. The problem? This makes their liquidation levels and potential margin calls incredibly easy for the market to calculate.

In the equity world, predatory hedge funds thrive on identifying such vulnerabilities. It’s a straightforward play for them: take massive short positions on Bitcoin to trigger a price drop, and then profit from the inevitable collapse of MicroStrategy’s stock. They aren't just betting against crypto; they are exploiting a structural flaw in Saylor’s financial engineering.

[Free Market Capitalist]

The core issue with MicroStrategy is that it pioneered a new category of DAT (Digital Asset Treasury) companies. By constantly accumulating Bitcoin through equity dilution and bond issuance, they’ve turned their securities into a form of collateral. The problem? This makes their liquidation levels and potential margin calls incredibly easy for the market to calculate.

That is the main problem I see in the short term. The hundreds of copycat companies that have tried to copy Strategy's model, usually companies in trouble that saw the model as a way out, but as things stand, they will likely need to sell or be liquidated.

In the equity world, predatory hedge funds thrive on identifying such vulnerabilities. It’s a straightforward play for them: take massive short positions on Bitcoin to trigger a price drop, and then profit from the inevitable collapse of MicroStrategy’s stock. They aren't just betting against crypto; they are exploiting a structural flaw in Saylor’s financial engineering.

I disagree with this. For Strategy to supposedly collapse in the short or medium term, the price of Bitcoin would have to fall much further. The way the business is structured, it can withstand a bear market without any problems. However, what is being questioned is the business model.

[fillippone]

After the much feared Earning Call, Strategy is surging pre market.
The CEO stating they are fine whit BTC above 8,000 USD has helped the situation, I guess.

Strategy CEO: Bitcoin would need to plunge to $8,000 before balance sheet issues

[Free Market Capitalist]

After the much feared Earning Call, Strategy is surging pre market.
The CEO stating they are fine whit BTC above 8,000 USD has helped the situation, I guess.

Strategy CEO: Bitcoin would need to plunge to $8,000 before balance sheet issues

I really doubt it has anything to do with that at all. Today's MSTR price is going up atm at 17% double the rise of Bitcoin at 8.5%, the same way yesterday it falled at 2X the Bitcoin price fall. Pre-market the price was surging because btc price was already up. Today, markets are generally up, with the S&P 500 and Nasdaq 100 also rising after yesterday's decline, as is normal.

[fillippone]

After the much feared Earning Call, Strategy is surging pre market.
The CEO stating they are fine whit BTC above 8,000 USD has helped the situation, I guess.

Strategy CEO: Bitcoin would need to plunge to $8,000 before balance sheet issues

I really doubt it has anything to do with that at all. Today's MSTR price is going up atm at 17% double the rise of Bitcoin at 8.5%, the same way yesterday it falled at 2X the Bitcoin price fall. Pre-market the price was surging because btc price was already up. Today, markets are generally up, with the S&P 500 and Nasdaq 100 also rising after yesterday's decline, as is normal.

Agree.
But this is another hit at the "market is dumping to kill Strategy" nonsense I have been hearing in the past months.
Even STRC has recovered slightly, and this instrument should be less directional with BTC price, but more tied to the "credit rating" of the firm itself.
In my humble opinion, Strategy is safe, for the moment.
"Safe" as "not prone to bankruptcy" non as "safe investment".

[Ambatman]

I really doubt it has anything to do with that at all. Today's MSTR price is going up atm at 17% double the rise of Bitcoin at 8.5%, the same way yesterday it falled at 2X the Bitcoin price fall. Pre-market the price was surging because btc price was already up. Today, markets are generally up, with the S&P 500 and Nasdaq 100 also rising after yesterday's decline, as is normal.

Mnav rose a little
Something it hasn't done for sometime now and I believe strategy might have gotten some Bitcoin around the price of $60K+
But I don't know how long this recovery would last
I expect some volatility before fed announcement on the 11th.

[Free Market Capitalist]

Agree.
But this is another hit at the "market is dumping to kill Strategy" nonsense I have been hearing in the past months.

Yeah, that's nonsense.

What is clear is that there are people who have made a fortune shorting Strategy for almost a year, just as there are people who have made a fortune shorting Bitcoin in the recent crash.

I think you just chose the wrong time to short it.

Even STRC has recovered slightly, and this instrument should be less directional with BTC price, but more tied to the "credit rating" of the firm itself.

We disagree on this point. In my opinion, STRC is clearly a junk preferred stock, the worst kind, and the more the dividend rises while we are in a bear market, the more junk it is.

In my humble opinion, Strategy is safe, for the moment.
"Safe" as "not prone to bankruptcy" non as "safe investment".

Yes, with that caveat, I agree too. The obligations were structured in such a way that the risk of bankruptcy is extremely low in a bearish scenario like the one we seem to be continuing to face this year.

Mnav rose a little

Due to yesterday's rebound, I suppose, in which Bitcoin ultimately rose 10% and MSTR rose 25%.

Something it hasn't done for sometime now and I believe strategy might have gotten some Bitcoin around the price of $60K+
But I don't know how long this recovery would last
I expect some volatility before fed announcement on the 11th.

Now, focusing not on MSTR but on the price of Bitcoin, I think Friday's rally could be a dead cat bounce. It's not uncommon in bear markets to see big spikes, only for the market to continue falling. But nothing is certain. We could have hit the low for the year and start rising from now on, which I personally think is unlikely.

[fillippone]

Another week, another buy, anotehr dip:



A couple of interesting ghraph, to assess the current situation:

	Purchase History	mNAV