In a dramatic turn of events in the crypto market, Strategy, the treasury firm led by Michael Saylor, is set to continue its aggressive acquisition of Bitcoin, which may soon surpass Satoshi Nakamoto in holdings. According to Alex Thorn, head of research at Galaxy Digital, if the current pace of buying continues, Strategy could eclipse the pseudonymous Bitcoin creator and become the largest single holder within a mere two years.
This remarkable projection underlines the growing influence of one company over the cryptocurrency market. Over the past eight weeks, Strategy has committed a staggering $7.2 billion to Bitcoin, a move described by Bitwise’s chief investment officer, Matt Hougan, as the “single biggest factor” contributing to Bitcoin’s recent ascent of approximately 20%, climbing from its February low of $62,820 to around $76,550 as of last week.
A Preferred Stock Is Funding The Buying
The financial fuel behind these sizable purchases is STRC, Strategy’s perpetual preferred stock. The issuance of STRC shares is designed to channel most of the raised capital directly into Bitcoin. Investors have shown keen interest in this instrument, particularly due to its attractive annual yield of 11.5%, which markedly outperforms current junk bond offerings.
Hougan pointed out that as private credit becomes less favorable amongst investors, STRC’s yield, backed by a Bitcoin reserve exceeding $40 billion, stands out as a compelling opportunity. He anticipates that Strategy will likely increase its capital raise through this financial vehicle.
Strategy’s weekly Bitcoin acquisitions have become notable events on the crypto calendar. Their most recent purchase, comprising 3,273 coins for $255 million between April 20 and 26, has pushed their holdings to an impressive 818,334 BTC, surpassing BlackRock’s accumulated total of roughly 812,300 coins held for its clients.
Dividend Payments Could Last Decades
In a striking analysis, Hougan calculated that at current Bitcoin prices, Strategy could continue to meet its dividend commitments for an astonishing 42 years. If Bitcoin’s value grows at an annual rate of 20%—a sentiment echoed by Saylor—those dividend payments could potentially last indefinitely. Hougan expressed confidence that the buying spree is likely to persist for the foreseeable future.
Additionally, Exchange-Traded Funds (ETFs) and significant individual buyers have played a key role in Bitcoin’s market recovery, with ETF inflows reaching $3.8 billion since March 1. However, Hougan emphasized that Strategy’s consistent large-scale purchases have had a more significant impact than any other influencing factor combined.
As it stands, wallets attributed to Satoshi Nakamoto still hold a little over a billion Bitcoins, equating to approximately 5.5% of the total supply. For Strategy to mirror this, they would need to accumulate around 277,660 more coins. Historically, their weekly purchasing patterns have varied widely—from as few as 850 coins in February to a staggering 34,160 in a single day in April. Thus, the timeline for reaching this goal hinges on the company’s purchasing strategy.
Featured image from MetaAI, chart from TradingView
