Strategy Halt: Bitcoin Loses Biggest Corporate Buyer Amid Falling Premium

Strategy, a financial and technology company that has been buying Bitcoin for years, has stopped purchasing the cryptocurrency. This marks its longest pause in nearly two years.

In its latest announcement, Strategy revealed it spent $25 million last week buying back its own preferred stock, known as STRC, at an average price of $86.52 per share. The company has used this money to fund its repurchase program and retire expensive obligations at a discount.

Strategy's decision not to buy Bitcoin is largely due to the fact that the premium on its stock over the value of its underlying assets, including Bitcoin, has fallen significantly. In November 2024, investors paid 3.4 times the value of Strategy's Bitcoin to own the stock, but now the ratio is roughly 1:1.

This means that selling common stock to buy coins no longer leaves shareholders better off, and as a result, Strategy has stopped adding to its Bitcoin holdings. The company still owes $10 billion in preferred dividends, regardless of the Bitcoin price, and is using its growing dollar reserve to fund these payments.