Strategy, the world's largest Bitcoin holding company, has shifted its funding model from convertible bonds to a structure heavily reliant on perpetual preferred shares STRC, according to an analysis of 4orDex institutional holdings data. The company launched STRK in February 2025, followed by STRF, STRD, and STRC in July 2025, while institutional holdings of its convertible bonds and STRK have declined. In May 2025, Strategy redeemed $1.5 billion in convertible bonds due 2029 for approximately $1.38 billion cash, reducing its USD reserves to around $870 million and its estimated dividend and interest payment capacity from roughly 30 months earlier in the year to 6-7 months. The shift occurred as the company issued multiple new securities following its initial convertible bond program. STRC now accounts for 88% of preferred share trading volume, marking a transition from institution-focused liquidity to a retail-oriented funding structure.
Strategy Issued Four New Securities Following Convertible Bonds
Strategy's initial funding model relied on convertible bonds purchased by institutional investors, with proceeds used to acquire Bitcoin. The company later expanded its funding instruments by issuing STRK in February 2025, followed by STRF and STRD, and then perpetual preferred shares STRC in July 2025. The successive launches of new securities occurred as the company sought additional capital sources beyond its original convertible bond program.
4orDex Data Shows Institutional Holdings Decline
4orDex tracking data indicates institutional holdings of Strategy's convertible bonds began declining this year. Institutional holdings of STRK also decreased rather than increased, according to the data. The decline in institutional participation in both convertible bonds and STRK coincided with Strategy's increased focus on STRC issuance. The data reflects a shift in the composition of the company's investor base away from institutional capital.
STRC Represents 88% of Preferred Share Trading Volume
STRC accounts for 88% of preferred share trading volume, according to current 4orDex data. The security features a variable dividend structure and requires price maintenance near $100 for the company to continue issuing new shares and raising cash. Higher dividend rates become necessary if STRC's price declines, which increases Strategy's funding costs. The company has raised STRC dividend rates and adopted more aggressive dividend payment schedules in recent periods.
May 2025 Bond Redemption Reduced Cash Reserves to $870 Million
In May 2025, Strategy redeemed $1.5 billion in convertible bonds due 2029 for approximately $1.38 billion in cash. The early redemption reduced the company's USD reserves to around $870 million. Strategy materials estimate current dividend and interest payment capacity at approximately 6-7 months, compared to roughly 30 months estimated earlier in the year. The 4orDex report titled "MSTR (Strategy) Funding Capacity" documents the reduction in institutional convertible bond holdings and preferred share (STRK) positions. Michael Saylor, Strategy's chairman, no longer uses absolute language about never selling Bitcoin in recent statements.
FAQ
What securities did Strategy issue in 2025?
Strategy issued STRK in February 2025, followed by STRF, STRD, and perpetual preferred shares STRC in July 2025. These securities were launched following the company's initial convertible bond program.
How much cash did Strategy have after its May 2025 bond redemption?
Strategy's USD reserves dropped to approximately $870 million after redeeming $1.5 billion in convertible bonds due 2029 for around $1.38 billion cash in May 2025. The company's estimated dividend and interest payment capacity fell from roughly 30 months earlier in the year to 6-7 months following the redemption.
