Strategy’s U.S. dollar cash reserves have risen to a record $4.65 billion.
By: Oluwapelumi Adejumo
Compiled by: Chopper, Foresight News
As Bitcoin treasury firm Strategy continues to repurchase preferred shares, the STRC price is steadily recovering toward its $100 target price.
STRC.live data shows that on Monday, the STRC trading price hovered around $95, rebounding continuously from the $74 low at the end of June. Strategy is narrowing the discount on STRC by both directly repurchasing shares in the secondary market and launching a 12% annualized dividend.
Over the past three weeks, Strategy has cumulatively bought about 2.3 million shares of STRC, with a total value of approximately $214.8 million. The latest round is also the largest buyback: as of the week ending August 9, the company spent $108.6 million to buy 1.1 million shares. The two prior rounds invested $25 million and $81.2 million, respectively.
Under the $1.0 billion digital credit securities share repurchase program approved in June, Strategy currently has $785.2 million in remaining available capacity.
Strategy’s STRC preferred share price rebounded. Earlier, the company repurchased about $214.8 million worth of stock within three weeks.
Selling Bitcoin to provide funding for STRC repurchases
In recent weeks, Strategy has increasingly tapped into its Bitcoin inventory to raise funds to repurchase STRC. Within the week up to August 9, Strategy sold 1,690 bitcoins at an average price of $64,262, realizing $108.6 million.
A week earlier, the company carried out the same type of operation: it sold 1,638 bitcoins and raised $104.7 million. Of that, $52.3 million was used to repurchase STRC with a notional size of $81.2 million; the remaining funds came from the issuance of additional MSTR common stock.
Within two weeks, Strategy sold a total of 3,328 bitcoins, raising about $213.3 million; in the same period, it invested $189.8 million to repurchase STRC.
After completing this round of sales, Strategy’s Bitcoin holdings fell from 842,138 bitcoins a week earlier to 840,447. The company’s current total cost basis for its Bitcoin holdings is $63.36 billion, with an average cost of $75,385 per coin.
After the fourth consecutive week of reducing its holdings, Strategy cumulatively sold 6,948 bitcoins this year. Its holdings have continued to decline from the June peak of 847,363 bitcoins. However, compared with its massive Bitcoin inventory, the amount reduced is relatively limited, and Strategy remains the company that holds the most Bitcoin globally.
Strategy’s Bitcoin holdings have continued to decline for four consecutive weeks
A series of transactions indicates that under Strategy’s digital credit capital framework, Bitcoin has been assigned a broader range of functions. The company can selectively liquidate portions of its holdings to support preferred stock and other debt within its capital structure.
U.S. cash reserves hit a record high of $4.65 billion
In the same week, Strategy accelerated the expansion of its cash reserves by raising an additional $653.1 million through the issuance of common shares.
The company sold 6.5 million shares of MSTR Class common stock through an on-market continuous offering program (ATM). Of the proceeds, $650 million was credited to the U.S. dollar reserves account, and the remaining $3.1 million was allocated to the general cash account.
This move boosted the company’s U.S. dollar reserves from $4.0 billion a week earlier to a record high of $4.65 billion. This reserve can provide a liquidity buffer for STRC preferred share dividends and debt interest payments. Against the backdrop of ongoing capital structure expansion and steadily increasing fixed expenditures, it effectively strengthens the safety margin.
Strategy Chief Executive Officer Phong Le said that since the new capital management framework was rolled out at the end of June, the size of its U.S. dollar reserves has grown rapidly. He wrote: “Both our U.S. dollar reserves and duration have reached historic highs. In just the past two and a half months, reserves have added nearly $3.8 billion, and both metrics have grown more than fivefold. This is the result of the rollout of the digital credit capital framework.”
Strategy’s cash reserves
The Chairman and CEO of Julia10_ Michael Saylor said that this capital injection further extends the U.S. dollar reserves duration by another 143 days, bringing total duration to about 2.7 years. The U.S. dollar funds currently held are sufficient to cover the preferred stock dividends and debt interest payments over the next nearly three years, significantly easing near-term debt repayment pressure.
Strategy’s MSTR on-market continuous offering program still has approximately $2.2 billion in remaining capacity. In addition, an authorization for a $1.0 billion common stock repurchase is still unused and has not been activated.
Ample cash reserves give Strategy greater room to operate, so when it comes to dividends and debt maturities, it does not need to rely on external financing.
The final $5 spread in STRC will determine its future direction
With STRC still about $5 short of its $100 par value, the next key test is whether the stock can repair the price spread without relying on Strategy to prop it up. The company has also previously warned that returning STRC to par value will take some time.
In the company’s Q2 earnings call, it said that after STRC was listed in 2025, it took about 70 trading days to stabilize above $100. Based on a similar pace, this rebound may return to par value around September 8.
But this time the market environment is different. Strategy actively provided a backstop through a combination of adjusting dividend policy and directly repurchasing shares in the secondary market.
Once the price returns to the $100 par value, the company would no longer need to carry out large-scale ongoing repurchases, and STRC can better serve as a financing tool. Issuing new shares at prices close to par, compared with the period of long-term trades at a discount, can significantly improve financing efficiency.
If STRC’s upside momentum is insufficient and it continues to hover below the $100 par value, Strategy still holds $785.2 million in repurchase capacity and can step in to prop it up at any time.
As long as STRC is significantly below the target price, Strategy will take decisive action to intervene. But the biggest question in the market right now is: if the company wants to push STRC through the final few dollars of its rise, how much additional capital will it need to spend on propping up the price—and whether it will continue selling bitcoins.