After scooping up nearly 3% of Bitcoin’s entire supply, Strategy has hit the pause button on its relentless buying streak for now.
A new filing with the U.S. Securities and Exchange Commission on July 7 confirmed that the Tysons Corner, Virginia-based firm didn’t buy any Bitcoin between June 30 and July 6. That marks its first week without an acquisition since early April.
The pause comes on the heels of a staggering $14.05 billion unrealized gain in the second quarter, showcasing the success of Strategy’s aggressive Bitcoin accumulation. The company now holds a whopping 597,325 BTC, valued at around $64.4 billion at current prices. Overall, Strategy’s Bitcoin stash has racked up a paper profit of $22 billion on its total $42.4 billion investment.
While Strategy’s founder Michael Saylor joked on social media that “some weeks you just need to HODL,” the halt in purchases raises questions about the firm’s next move.
Despite the eye-popping Q2 gains, Strategy may be hitting pause to recalibrate. According to the SEC filing, the company’s last purchase was on June 29, when it snapped up 4,980 BTC for $531.9 million at an average price of $106,801 per coin. Since then, the company has stayed on the sidelines, even as Bitcoin’s price has hovered between $105,000 and $110,000.
The decision to hold off could reflect a need to sort out tax implications or to rebalance funding sources after burning through much of its original $42 billion capital-raising plan. Notably, the firm logged a $4.04 billion deferred tax expense tied to the unrealized gains. Although those profits exist only on paper, the tax bills tied to them are very real.
Strategy’s buying spree has largely been funded through a combination of stock sales and debt offerings. In Q2 alone, the company raised $6.8 billion from at-the-market sales of its Class A common stock ($MSTR) and from three new perpetual preferred stock offerings STRK, STRF, and STRD.
These preferred shares, with dividend yields ranging between 8% and 10%, have helped Strategy tap investor demand for yield while minimizing dilution. Still, the approach carries risks. The firm’s ambitious “42/42” plan which doubles its initial $21 billion fundraising target is now eyeing $84 billion in capital by 2027 via equity and convertible notes.
So far, Strategy’s bold bets have paid off. But with such aggressive moves, the company remains vulnerable if Bitcoin’s price stagnates or declines and investor enthusiasm starts to wane.
