Original title: "How did STRC become Strategy's 'money printing machine 2.0': Bitcoin holdings surpass BlackRock?"
Original source: TechFlow TechFlow
Funding capacity does not equal execution path; whether Bitcoin can cooperate is the real variable.
On April 20, Saylor posted a screenshot on X showing Strategy's Bitcoin holdings tracker, with the caption: "Think Even Bigger".
24 hours later, the answer was revealed: 34,164 bitcoins, $2.54 billion, with an average purchase price of $74,395 per bitcoin. This was the third largest single transaction in history and the largest weekly purchase this year.
More importantly, there is another number: 815,061.
This is Strategy's total Bitcoin holdings as of April 19th. Meanwhile, across the Atlantic, BlackRock's IBIT, the world's largest Bitcoin spot ETF, holds 802,823 Bitcoins.
Saylor's company has officially surpassed BlackRock in Bitcoin holdings.
Two kinds of logic, two kinds of machines
To understand the significance of this matter, we must first understand how these two institutions accumulated Bitcoin.
BlackRock's IBIT is like a pump. It draws funds from the market from retail and institutional investors, converting them into Bitcoin purchasing power. In the past week, IBIT saw a net inflow of approximately $900 million, corresponding to an additional 12,000 Bitcoins. The ceiling of this mechanism is market sentiment; funds flow in during bull markets and out during bear markets, and IBIT's holdings follow the tides.
Strategy is something else entirely. It doesn't wait for money to flow in; it actively raises funds to buy cryptocurrency.
The financing structure of this $2.54 billion purchase can be broken down as follows: 21,795,389 STRC preferred shares, cashing out $2.176 billion; and 2,165,000 common shares, cashing out $366 million.
85% comes from STRC, and 15% comes from MSTR common stock.
What is STRC: Saylor's "Money Printing Machine 2.0"
Strategy's history of accumulating Bitcoin can be divided into two eras.
From 2020 to 2024, the strategy relied on convertible bonds. This involved issuing zero- or low-interest convertible bonds to institutional investors, using the proceeds to buy Bitcoin, and betting that Bitcoin's price would rise more than the cost of the debt. This approach was effective, but it has a ceiling. Convertible bonds have maturity dates, and each issuance depends on a specific window of opportunity. If the interest rate environment deteriorates, the potential for growth narrows. The more fundamental problem is that the creditors of convertible bonds are debtors, not Bitcoin believers; they ultimately want their principal back.
In late 2025, Strategy launched STRC, a perpetual preferred stock with a fixed par value of $100 and a variable dividend. The word "perpetual" is key; it has no maturity date, no need to repay the principal, and only requires continuous dividend payments. Saylor himself called it the company's "iPhone moment."
Its mechanical principle is as follows:
Strategy issued STRC on the market at $100 per share. Buyers received a promise of an annual variable dividend, with the dividend rate dynamically adjusted based on the market price of STRC, aiming to keep STRC pegged to its $100 face value. Strategy then used all of this money to buy Bitcoin.
This involves an automatic price regulator design. If the STRC falls below $100, it means the market finds the current dividend unattractive, so Strategy raises the dividend to bring the price back up. If the STRC rises above $100, it means demand is overheated, so Strategy lowers the dividend to curb the premium. The price is always kept near par value by this regulator, thus keeping Strategy's issuance window always open.
Last week, STRC's peak daily trading volume reached $750 million, with an average daily trading volume exceeding $300 million, making it almost the most liquid preferred stock in the US market. However, liquidity is only the surface; the true driving force behind this machine requires three conditions to be met simultaneously to sustain it.
Condition 1: STRC must remain at a face value of $100.
This is the physical switch for the entire system. Strategy only actively issues new shares when the STRC price equals $100. Issuing shares below par value means that Strategy is selling its financing capacity at a discount, which is equivalent to using the money obtained at a 10% discount to buy Bitcoin, immediately worsening the cost structure.
In March of this year, STRC fell below par value for three consecutive days. The flywheel didn't stop, but Strategy was forced to raise its dividend and use higher financing costs to bring the price back up.
Condition 2: The price-to-book ratio (mNAV) of MSTR common stock must be higher than 1.
Strategy's ultimate goal is not to buy Bitcoin, but to increase "the number of Bitcoins per share".
When MSTR's market capitalization exceeds the market capitalization of its Bitcoin holdings (mNAV > 1), issuing common stock to buy Bitcoin is profitable. It's like exchanging paper for physical Bitcoin, increasing the Bitcoin content per share and benefiting existing shareholders. However, once mNAV falls below 1, the logic completely reverses: issuing common stock becomes a discounted liquidation. With each share issued, the Bitcoin content per share decreases, and dilution becomes a real harm. After this purchase announcement, MSTR actually fell by 2.5%, and mNAV hovered around 1.0, which is currently the most sensitive reading for this machine.
Condition 3: The price of Bitcoin cannot continue to fall.
This is the most fundamental condition, and also the most difficult variable to hedge.
Strategy's balance sheet is almost entirely composed of Bitcoin, and the purchase cost of $6.156 billion corresponds to the current market value of its holdings, which is roughly the break-even point.
If the price of Bitcoin remains below the average price of $75,527 for an extended period, two things will happen simultaneously: Strategy's net assets will shrink, STRC's credit backing will weaken, and investors will question whether the company can continue to pay dividends. STRC will then begin to fall below par value, which in turn will trigger the alarm in condition one.
To put it more bluntly: this machine needs the price of Bitcoin to be maintained at a level that allows the market to believe that "Strategy's assets can cover its liabilities".
A report by capital markets analysis firm NYDIG describes this structure as a self-reinforcing closed loop: STRC maintains its face value → Strategy raises funds to buy Bitcoin → Bitcoin's balance sheet expands → STRC's credit backing strengthens → continued issuance. When all three conditions are met, the flywheel spins faster and faster. When any one condition loosens, the flywheel doesn't stop immediately, but begins to deplete reserves, increasing dividends, reducing common stock issuance, and relying on remaining financing to gamble on a Bitcoin price recovery before the buffer is exhausted.
This $2.54 billion purchase was primarily funded and deployed within two days, Monday and Tuesday. Two days, $2.5 billion, from issuance to completion. Such speed is virtually unprecedented in the public market. This in itself is proof of the flywheel's healthy state; when all three conditions are met, the machine can operate at speeds exceeding anyone's imagination.
Problems hanging in the air
This machine is not without risk, and the form of risk is more subtle than most people imagine.
BitMEX Research once pointed out in a report that the risks associated with STRCs are "far greater than those of short-term US Treasuries," but a more accurate statement would be: the risk of STRCs is not whether the Strategy will default, but who will bear the losses once the flywheel stalls.
The answer is STRC holders. Strategy can cut its dividend without triggering a legal default, a fundamental difference between perpetual preferred stock and bonds. The dividend shrinks, the STRC falls below par value, and investors suffer paper losses, but Strategy doesn't go bankrupt.
This structure directs market pressure towards investors, not issuers. This is Saylor's brilliance, and the reason he is known as a "financial engineer" rather than just a "Bitcoin believer."
Saylor's current plan is to accumulate 1 million Bitcoins by the end of 2026. He still has a shortfall of approximately 185,000 Bitcoins. With the support of the existing STRC issuance quota (approximately $19.46 billion) and the MSTR common stock quota (approximately $26.7 billion), this goal is not far off in terms of fundraising capacity.
However, the amount of funding raised does not equal the execution path. Whether Bitcoin can cooperate is the real variable.
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