Strategy STRC, $28.3 Billion Limit Confirmed...Will Bitcoin Purchases Completely Halt?

▲ Strategy (MSTR), Bitcoin (BTC)/ChatGPT generated image

An analysis suggests that Strategy's (Bitcoin, BTC) purchase funding structure could face key constraints within the next year. Cointelgraph reported on May 14 (local time), citing a Delphi Digital report, that Strategy's variable-rate Series A perpetual stretch preferred stock, STRC, is approaching its approved issuance limit of approximately $28.3 billion.

Delphi Digital analyzed that while STRC has become one of Strategy's primary means of Bitcoin acquisition, if the issuance limit is reached without extension, dividend obligations would remain, but Bitcoin accumulation could slow down or stop. Cointelgraph stated that this report highlights a turning point in the funding structure that could determine the pace of accumulation for Strategy, the largest corporate Bitcoin holder.

Strategy announced on Monday that it purchased an additional 535 BTC for $43 million. This was its first investment since acquiring 3,273 BTC for $255 million on April 27. According to the filing, only about $100,000 of the funds for this 535 BTC purchase were raised through STRC issuance, with the majority, $42.9 million, being raised through the sale of Class A common stock, MSTR.

STRC was first introduced in July 2025 when Strategy raised $2.5 billion through an initial public offering. STRC is a preferred stock security listed on Nasdaq, currently paying a variable monthly dividend of 11.5%. Furthermore, due to its perpetual structure, the company is not obligated to repurchase these shares on a specific date.

Delphi Digital researchers believe that Strategy could utilize other funding methods even if it reaches the STRC issuance limit. A key variable is the market net asset value (MNAV) multiple, which indicates at what level the enterprise value is trading relative to the total value of its crypto holdings.

Ceteris, Head of Research at Delphi Digital, explained that Strategy would use STRC as its primary means of accumulation as long as MSTR's MNAV remains low. He stated that if MSTR's MNAV expands again, increasing at-the-market common stock sales for Bitcoin purchases could be a prudent choice.

Strategy's MNAV was 1.25x as of Thursday, down from 2.11x a year ago. This means that Strategy's stock is still trading at a premium to the value of its Bitcoin holdings. Generally, if MNAV falls below 1, funding capabilities are limited, and above 1, additional stock issuance can fund Bitcoin purchases.

Strategy faces its next major cash obligation in September 2027. Aatharv D, the Delphi Digital researcher who authored the report, explained that this obligation is expected to be fully covered by the company's $2.25 billion cash reserves. He added that Strategy's financial health does not read as alarming, and if management believes a cycle bottom has formed, they would likely strengthen Bitcoin accumulation rather than reduce it.

Currently, Strategy uses an at-the-market stock offering program to pay preferred stock dividends. However, an analysis suggests that if MNAV expands, common stock issuance could again work positively for shareholder value, and at that point, at-the-market funds could be redirected towards Bitcoin accumulation, giving STRC some leeway. Strategy introduced its latest $44 billion at-the-market offering program on March 24.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*