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STRC can help the strategy reach 1 million bitcoins faster and beat BlackRock
Cryptocurrency

STRC can help the strategy reach 1 million bitcoins faster and beat BlackRock

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Michael Saylor’s Strategy (MSTR) may hit the 1 million Bitcoin (BTC) milestone sooner than expected, possibly overtaking BlackRock in terms of total assets.

Key considerations:

  • The sale of STRC shares resulted in over 3,500 BTC in cash.

  • The Strategy’s projected buying power could increase to around 5,700 BTC per day at a record high on Tuesday.

BTC Strategy shares over time. Source: BitBo.IO

STRC’s growing demand implies 1,940 BTC of daily purchasing power

The strategy currently holds 738,731 BTC, including the purchase of 17,994 BTC announced on Monday. Meanwhile, BlackRock iShares Bitcoin Trust (IBIT) has 775,156 BTC, or about 36,500 BTC more than today’s Strategy.

But a relatively new tool, Strategy STRC preferred stock, helps to quickly close this gap.

STRC currently pays an annual dividend of 11.50%, which is distributed monthly in cash.

The dividend rate is adjusted monthly to encourage the stock to trade near its par value of $100, which helps limit its volatility. The strategy uses the proceeds from the sale of stocks to buy Bitcoin.

The STRC.LIVE data source shows that this week alone, Strategy bought more than 3,500 BTC after selling nearly 6 million shares of STRC through the over-the-counter (ATM) program.

STRC Volume and BTC Buy Estimates. Source: STRC.LIVE

Among the top buyers of STRC is the investment company Bitcoin Strive.

On Wednesday, Chief Risk Officer Jeff Walton said they had $50 million in STRC, noting that the split would generate about $5.75 million in annual revenue on STRC’s current revenue.

Source: X

That’s up from about $1.85 million in 13-week bills, a difference of about $3.90 million a year.

On Tuesday, STRC had a record volume of $409 million and a 30-day average of $138.5 million.

STRC control panel. Source: Strategy

Using an average daily trading volume of $138.5 million and a Bitcoin price close to $71,000, STRC could theoretically buy around 1,940 BTC per trading day, more than four times the daily Bitcoin mining supply.

On days when STRC trades close to a record $409 million, the potential purchasing power increases to about 5,700 BTC, or about 13 times the daily mining.

At this rate, Strategy’s bitcoin holdings could surpass the 1 million BTC mark by August, possibly surpassing BlackRock as well.

MSTR could tap into the $145.1 trillion fixed income market

According to analyst Adam Livingston, STRC could soon compete with traditional fixed income markets.

Global fixed income markets will reach $145.1 trillion in 2024, and US fixed income will reach $48.9 trillion by Q3 2025, Livingstone said in a message on Wednesday, adding:

“If a product like STRC ends up attracting even 0.1% of sustainable global revenue, that’s $145.1 billion. At $71,2000 per Bitcoin, that amount of capital would be enough to buy about 2.04 million BTC.”

STRC is still a risk for investors

In its disclaimer, Strategy cautioned that STRC does not guarantee returns, noting that it “is not a bank deposit, is not FDIC insured, and is not regulated as such.”

In addition:

“It does not have the same regulatory and other protections as bank accounts, money market funds, Treasuries or similar instruments and as a result may not be a comparable investment.”

Strategy analyst ColinTalksCrypto also warned that STRC could cut dividends, its share price could fall below its $100 par value, and Strategy could issue more shares, diluting existing holders.