Bitcoin’s latest rally may still have room to run if Strategy keeps tapping STRC to fund new Bitcoin purchases, according to Bitwise CIO Matt Hougan.
In his weekly memo, Hougan said Bitcoin has climbed roughly 20% from its February lows and is trading near $76,000, supported by ETF inflows, renewed long term holder buying, and Strategy’s aggressive accumulation. He described Strategy as the single biggest factor behind the move after the company added $7.2 billion in Bitcoin over the past eight weeks.
Strategy has funded those purchases through STRC, a perpetual preferred equity instrument designed to trade around $100 per share while offering a high dividend yield. The yield currently stands at 11.5%, after Strategy raised it from 9% to help keep the instrument near its target price.
Hougan said Strategy issues STRC mainly to raise capital for additional Bitcoin purchases. While the dividend is largely funded by new capital raises, he argued the structure is backed by Strategy’s Bitcoin holdings, which currently stand at about $63 billion.
Strategy also has $8 billion in debt and $14 billion in preferred equity, leaving total obligations at about 33% of its Bitcoin holdings, according to the memo. Hougan said investors may begin asking harder questions if that figure moves toward 50%.
At current Bitcoin prices, that still leaves room for another $10 billion to $15 billion in STRC issuance, Hougan said. He added that STRC’s 11.5% yield could continue attracting buyers as junk bonds yield less than 7% and investors move away from private credit.
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