Strategy pauses bitcoin buying spree for first time in 3 months amid Q2 results: ‘Some weeks you just need to HODL,’ Saylor says

Bitcoin treasury company Strategy (formerly MicroStrategy) paused its BTC acquisitions between June 30 and July 6, according to an 8-K filing with the Securities and Exchange Commission on Monday.

Strategy continues to hold a total of 597,325 BTC — worth over $65 billion — bought at an average price of $70,982 per bitcoin for a total cost of around $42.4 billion, including fees and expenses, according to the company’s co-founder and executive chairman, Michael Saylor. That’s the equivalent of more than 2.8% of bitcoin’s total 21 million supply and implies around $22.6 billion of paper gains.

The firm has been using proceeds from at-the-market sales of its Class A common stock, MSTR, perpetual Strike preferred stock, STRK, perpetual Strife preferred stock, STRF, and perpetual Stride preferred stock, STRD to fund its bitcoin acquisitions in recent weeks. During the quarter ended June 30, Strategy received aggregate net proceeds of $6.8 billion from these sales, the firm said in the filing.

STRD offers a fixed 10% non-cumulative annual dividend and is non-convertible, STRK is a convertible preferred stock offering a fixed non-cumulative 8% annual dividend, and STRF is non-convertible and offers a 10% fixed cumulative annual dividend.

Strategy’s STRK and STRF perpetual preferred stock’s respective $21 billion and $2.1 billion ATM programs are in addition to the firm’s “42/42” plan, which targets a total capital raise of $84 billion in equity offerings and convertible notes for bitcoin acquisitions through 2027 — upsized from its initial $42 billion, “21/21” plan after the equity side was depleted.

As of July 6, $18.1 billion worth of MSTR shares remain available for issuance and sale under that ATM program. $20.5 billion and $1.9 billion remain available under Strategy’s STRK and STRF programs, respectively.

Last week’s pause is the first time the firm has not bought bitcoin since the March 31 to April 6 period — coinciding with the release of its Q1 results on April 7, when Strategy disclosed $5.91 billion in unrealized losses on its bitcoin treasury for the period.

Following suit, Strategy released its Q2 results on Monday, disclosing an unrealized gain on digital assets of $14.05 billion. As a result, it also incurred an associated deferred tax expense of $4.04 billion. As of June 30, Strategy’s digital asset carrying value was $64.36 billion, with a related deferred tax liability of $6.31 billion, the firm said. Additionally, Strategy entered into a loan agreement during Q2 that provides for aggregate borrowings of up to $31.1 million, available in multiple tranches, to fund a capital asset purchase.

Saylor hinted at the pause ahead of time, sharing an update on Strategy’s bitcoin portfolio tracker on Sunday, stating, “Some weeks you just need to HODL.”

Strategy portfolio tracker. Image: Saylortracker.com.

Corporate bitcoin accumulation race

Strategy previously acquired an additional 4,980 BTC for approximately $531.9 million at an average price of $106,801 per bitcoin between June 23 and June 29. The pace of Strategy’s bitcoin buys has generally been slowing in recent weeks as it switched focus from its common stock ATM program to its perpetual preferred stocks for funding bitcoin acquisitions.

According to Bitcoin Treasuries data, there are now 135 public companies that have adopted some form of bitcoin treasury, with Tether-backed Twenty One, Nakamoto, Trump Media, and GameStop, recently joining the likes of Semler Scientific, and KULR in adopting the bitcoin acquisition model pioneered by Saylor and Strategy. Meanwhile, Japanese investment firm Metaplanet is ramping up its bitcoin purchases, announcing Monday it had bought an additional 2,205 BTC for $239 million, bringing its total holdings to 15,555 BTC.

Strategy’s $110 billion market cap trades at a significant premium to its bitcoin net asset value, with some investors continuing to air reservations about the firm’s premium to NAV valuation and its increasingly numerous bitcoin acquisition programs in general. Last week, analysts at TD Cowen said Strategy’s positive equity-to-BTC loop justifies the premium, while Franklin Templeton warned of an uncertain outlook for crypto treasury firms, citing “dangerous” negative feedback loop risks. New York-based law firm Pomerantz also filed a class action lawsuit against Strategy, alleging the company made false and misleading statements about its bitcoin investment strategy.

MSTR closed up 0.4% on Friday at $403.99, according to The Block’s Strategy price page, in a week that saw bitcoin gain 1.1%. MSTR is currently down 0.6% in pre-market trading on Monday, per TradingView, but remains 34.6% up year-to-date compared to bitcoin’s 16.9%.

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