Strategy buys 855 BTC as market volatility deepens

Strategy added 855 BTC during a turbulent week marked by liquidations and price drops in the crypto market. The company now holds an unrealized loss but has reassured the market of its commitment to holding. 

Strategy extended its BTC buying streak, though with a more modest 855 BTC for the past week. 

The average price of $76,052 is causing jitters, as BTC briefly dipped to $75,000. Later, BTC recovered to $77,958.84, though still trading with extreme fear. 

The recent purchase follows a period of more ambitious buying, where for two weeks Strategy poured more than $1B into BTC. The previous week, Strategy gradually slowed its purchases to 2,932 BTC.

This week’s purchase was closely watched for signs of confidence, as Strategy is now buying very close to its average price. The recent BTC additions from the past few bullish months are now carrying increasing unrealized losses. 

For now, the average Strategy acquisition price is below the market price, but BTC still trades with bearish sentiment. 

Strategy common stock MSTR loses ground

MSTR dipped to a local low of $143.19, just above its 52-week low of $139.36. MSTR declined on a mix of recent dilution, as well as lowered demand based on the BTC market risk. 

The common stock is supposed to amplify BTC movements, but the dip to $75,000 also discouraged MSTR investors. 

MSTR has been diluted over the course of 2,000 days, a recent milestone market by Strategy. At some points, Strategy maximalists still bought MSTR in hopes of a bigger recovery. After the recent market weakness, MSTR is seen as exposure to dilution and significant downside risk. 

Strategy relied on MSTR to buy more BTC

Despite the fears of dilution, last week’s raise came exclusively from MSTR. Another 673,527 MSTR were sold, for a total of $106M in proceeds. 

Strategy only spent around $75M on BTC purchases, retaining some for its other obligations. The company’s approach to using MSTR issuance for cash has led to more warnings of potential insolvency.

Strategy has dividend obligations, as in the past week, some raises switched to its preferred shares, STRC. The biggest appeal of STRC is its regular dividend, which offsets the price drop. Michael Saylor also announced an increased STRC dividend rate for February, in a bit to boost buying interest. 

STRC achieved a dividend rate of 11.4%, though the shares are not sold at all times. STRC is only issued when the price is at $99-$100, while in the past day, the price fell to $98.96 again. STRC was supposed to be the new flywheel for Strategy, but even the high rate promised did not generate sufficient demand.

Based on current prices, Strategy also owes 13% dividend on SATA and 13.9% on STRD. However, those preferred stocks have not expanded their supply in months.

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