Bitcoin-backed preferred shares have quietly become a roughly $13 billion market, giving treasury companies a way to raise capital without selling common stock or taking on fixed-maturity debt. For $BTC holders and public firms alike, the instrument is turning crypto volatility into a yield product.

The pitch is simple. Preferred shares do not increase the common share count, so existing owners avoid dilution. They are classified as equity rather than debt, meaning no maturity date and no forced repayment. In return, holders get dividends that rank ahead of common stock.

The yields are far above traditional fixed income. The five main U.S. bitcoin-backed preferred securities carry effective yields of 10.8% to 15.2%, compared with 3% to 4% on high-yield savings accounts. Strategy’s STRF, STRC, STRK and STRD together hold a market value near $12.5 billion. Strive’s SATA adds around $330 million.

Demand may outrun supply. Fixed-income institutions, including mutual funds, banks, pensions and insurers, hold $10.9 trillion in U.S. Treasuries. A 10 to 20 basis point shift from that pool would create $10.9 billion to $21.8 billion in demand, enough to validate near-term projections on its own. Supply is capped by bitcoin collateral: of 20 million BTC in circulation, exchange, spot ETF and mining holdings are excluded as customer assets or operating reserves. That leaves 1.26 million BTC in corporate treasuries, worth about $83 billion. Strategy alone controls some 845,000, or 67%.

Backers point to coverage ratios of 3.8 to 4.5 times, meaning issuers hold $3.80 to $4.50 in bitcoin for every $1 of preferred equity. By comparison, the median large-bank mortgage in Q3 2025 advanced 76 cents per dollar of home value. Strive chief risk officer Jeff Walton said the instruments are “significantly higher” security than 95% of bonds because they are backed by capital, not future cash flows.

Not every firm can issue. Walton lists a clean balance sheet free of senior secured debt, scale for $100 million-plus deals, and expertise in tax treatment, covenants and dividend policy. Encumbered bitcoin ranks ahead of preferred equity and would block most deals. Strive used a $225 million SATA offering in January to retire debt from its Semler Scientific acquisition, leaving its bitcoin unencumbered.

Risks are structural. Strategy’s common stock, MSTR, has fallen more than bitcoin over the past year, and Primitive Ventures investment partner Tony Lau described a possible cascade. Three of Strategy’s four preferreds trade below their $100 par value. Dividends rely on raising capital against a rising bitcoin price, though Strategy and Strive have disclosed cash reserves covering at least 12 months. Strategy CEO Phong Le has said the balance sheet holds unless bitcoin falls to $8,000 and stays there for five or six years. Projections see bitcoin-backed preferreds reaching 3% to 5% of the $1.3 trillion global preferred market by 2030, and as much as 10%, or $130 billion, later.

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