Strategy is pivoting toward preferred equity as its primary funding tool for bitcoin accumulation, following a $1.18 billion raise that underscores a move away from common stock.

Last week marked the first instance where the company leaned mainly on its STRC perpetual preferred shares to finance purchases. On Monday, Strategy revealed it had acquired 22,337 BTC over the previous week — its fifth-largest buy to date.

Most of that purchase was funded through the $1.18 billion STRC issuance, equivalent to roughly 16,800 BTC at an average price near $70,000. This significantly exceeded the $396 million raised via its at-the-market (ATM) common stock program, which had historically been its core funding mechanism. The company’s total bitcoin holdings now stand at 761,068 BTC.

The shift introduces higher fixed costs. With STRC carrying an 11.5% dividend, the latest issuance adds approximately $135 million in annual payouts, lifting Strategy’s total dividend obligations above $1 billion per year.

To offset this burden, the firm has set aside around $2.25 billion in cash reserves, providing a cushion as funding costs rise.

The move also reflects pressure on its equity base. With common shares down more than 70%, Strategy appears focused on limiting dilution and supporting its stock price. As a result, common equity issuance is likely to become more selective — used primarily when its multiple to net asset value (mNAV) is meaningfully above 1 or when additional liquidity is needed.

Overall, the company is shifting toward a preferred capital-driven model, with STRC now playing a central role in financing bitcoin purchases.

There are also early signs of strain in the preferred shares. STRC has traded below its $100 par value for three consecutive days following its March 15 ex-dividend date. With its one-month volume-weighted average price now under par, Strategy may look to raise the dividend by another 25 basis points to help stabilize the security.