Strategy, renamed from MicroStrategy in 2025, raises cash first and then uses it to buy bitcoin. Its funding mix includes excess cash, common-stock at-the-market (ATM) sales, convertible senior notes, preferred-stock offerings and preferred-stock ATMs. The approach can increase bitcoin per assumed diluted share, but it also creates dilution, interest, dividend, seniority and refinancing risks for shareholders.
Where the money for Strategy’s bitcoin purchases comes from
Strategy’s filings describe a treasury policy built around two kinds of assets: liquid resources needed to operate the business and bitcoin held as a reserve asset. When cash and other liquid assets exceed working-capital needs, the company can deploy the excess into bitcoin. When it wants to buy more than internal cash can support, it raises capital in public markets.
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The company’s stated method is to issue debt or equity securities, or use other capital-raising transactions, subject to market conditions, with the objective of using the proceeds to purchase bitcoin. In practice, that means Strategy does not rely on one permanent loan or a single stock sale. It repeatedly chooses among financing channels whose costs and effects on shareholders differ.
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1Repair Windows errors before they cause bigger problems2Fix the driver behind crashes, sound loss and screen glitches3Clear out junk files and repair common Windows errors| Funding source | How cash is raised | Primary claim created | Effect relevant to common shareholders |
|---|---|---|---|
| Excess cash | Operating cash and liquid assets above working-capital requirements | No new security claim | No immediate share dilution, but cash leaves the operating balance sheet |
| Class A common-stock ATM | New shares sold through agents at prevailing market prices over time | New common equity | Immediate increase in outstanding shares |
| Convertible senior notes | Investors lend money through notes that may convert into common stock | Debt until conversion or repayment; senior claim | Interest and repayment risk, plus potential or assumed conversion dilution |
| Preferred stock | Preferred IPOs and preferred-stock ATM programs | Senior equity with dividend and liquidation preferences | No ordinary-share issuance at sale, but dividends and senior claims reduce the residual value available to common stock |
Not every dollar raised becomes bitcoin. Strategy reports using capital-market proceeds for interest, preferred dividends, reserves and other corporate purposes as well as acquisitions. Therefore, the amount raised in a period can be higher than the amount spent on bitcoin.
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What Strategy bought in 2024 and 2025
Strategy’s 2026 Form 10-K, which reports results for 2025 and comparative 2024 activity, gives the clearest scale of the program.
| Year | Bitcoin purchased | Disclosed funding sources | Additional context |
|---|---|---|---|
| 2025 | $22.47 billion | 2030B convertible-note proceeds, preferred-stock IPO proceeds, preferred-stock ATM proceeds and Class A common-stock ATM proceeds | 225,030 BTC acquired during the year; 672,500 BTC held at December 31, 2025 |
| 2024 | $22.07 billion | Convertible-note proceeds, Class A common-stock ATM proceeds and excess cash | Convertible-note programs included 2028, 2029, 2030A, 2031 and 2032 notes |
Capital-markets proceeds totaled $25.15 billion in 2025. The difference between that figure and the $22.47 billion spent on bitcoin reflects the fact that financing also supports obligations and reserves. In 2024, the company reported $6.13 billion of net proceeds from its convertible notes and said it used those proceeds principally for bitcoin, while using part of the 2028-note proceeds to redeem secured notes.
How common-stock ATM sales work
Shares are sold gradually, not in one auction
An ATM program lets Strategy instruct sales agents to sell newly issued Class A shares into the public market. Sales occur over time at then-prevailing market prices, rather than at one pre-negotiated price. The company can adjust the pace, pause sales or use available capacity when market conditions are favorable, subject to the terms of its registration and sales agreements.
Because the shares are newly issued, an ATM raises cash and expands the common-share count. An existing holder who does not buy additional shares owns a smaller percentage of the company after issuance. The economic effect per share depends on the price at which Strategy sells, the amount of bitcoin acquired with the proceeds, bitcoin’s market value and the number of shares investors assume will ultimately exist.
A dated example of the mechanism
In a November 11, 2024 SEC-filed release, the company said it had sold 7,854,647 shares for approximately $2.03 billion net under an August $2 billion ATM and an October $21 billion ATM. It said those proceeds funded the purchase of 27,200 BTC between October 31 and November 10, 2024, at an average price of $74,463 per bitcoin. The example shows the sequence: issue shares, receive cash, then acquire bitcoin. It does not establish that every future ATM sale will produce the same bitcoin-per-share result.
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Why an ATM can be attractive to the issuer
- It can raise equity without creating a fixed maturity date or mandatory interest payment.
- It can be used in smaller increments, allowing the company to respond to the trading price of its stock and bitcoin.
- It can provide a source of cash when issuing a large bond or preferred offering would be less practical.
The trade-off is direct dilution. If shares are sold when the market price is weak, more shares are required to raise the same cash. If the proceeds do not add enough bitcoin value per share, existing holders can experience economic dilution even when total bitcoin holdings rise.
How convertible senior notes fund bitcoin
Debt first, possible equity later
A convertible senior note gives Strategy cash today in exchange for a contractual promise to pay interest and repay principal at maturity unless the instrument is converted, repurchased or otherwise settled under its terms. The conversion feature allows holders to exchange the debt for common stock when specified conditions are met. Until conversion, the notes remain debt rather than common equity.
Strategy’s 2024 financing included 2028, 2029, 2030A, 2031 and 2032 convertible notes. The company reported $6.13 billion of net proceeds from those transactions and said it principally used the money to acquire bitcoin. Part of the 2028 proceeds instead redeemed secured notes, illustrating why gross financing proceeds should not be treated as bitcoin purchases dollar for dollar.
Where dilution enters the calculation
If noteholders convert, Strategy issues common shares or settles the conversion under the relevant note terms. That can dilute existing holders. Even before conversion, the company includes assumed conversion in the diluted-share calculation used for its BTC Yield metric. Consequently, a headline share count that excludes potential conversions can understate the share base used for the company’s own accretion analysis.
The obligations that remain if conversion never happens
- Interest is a cash requirement during the life of the notes, subject to each note’s terms.
- Principal generally must be repaid or refinanced at maturity if holders do not convert.
- Senior debt ranks ahead of common equity in a liquidation and can limit financial flexibility.
- Secured instruments may involve collateral; the specific collateral and protections depend on the individual issuance.
Convertible financing therefore exchanges some immediate dilution for contractual payment and maturity risk. A rising Strategy share price can make conversion more likely, while a weak share price can leave the company facing repayment or refinancing needs without the expected equity conversion.
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How preferred stock fits into the financing mix
Preferred offerings and preferred ATMs
In 2025, Strategy expanded its use of preferred securities. Its Form 10-K attributes $5.69 billion of capital-markets proceeds to STRF, STRC and STRD offerings and ATMs. Preferred-stock IPOs sell newly created preferred securities in a discrete offering; preferred-stock ATMs sell them over time through market transactions.
Preferred stock is equity rather than debt, but it is not equivalent to Class A common stock. Preferred holders typically receive specified dividend rights and rank ahead of common holders for distributions and liquidation. Strategy’s filings state that its preferred securities rank senior to Class A common stock and can have claims on bitcoin and other assets in a liquidation.
Why preferred stock can reduce ordinary-share dilution
Issuing preferred stock does not automatically increase the number of common shares outstanding in the way a common-stock ATM does. It can therefore raise cash without the same immediate assumed-diluted-common-share increase. That does not make it free capital: preferred dividends are cash obligations or accumulating claims under the applicable terms, and preferred holders receive value before common shareholders if assets are distributed.
For 2025, the company said $19.46 billion of capital-markets proceeds came from STRK and Class A common-stock ATMs, the 2030B convertible notes and the STRK IPO, while the STRF, STRC and STRD transactions accounted for $5.69 billion. The figures describe sources of financing, not a promise that each class funded a separately identifiable batch of bitcoin.
What BTC Yield means
BTC Yield is Strategy’s chosen key performance indicator for assessing whether its bitcoin-acquisition strategy is accretive to shareholders. It measures growth in bitcoin holdings relative to assumed diluted shares. The denominator is important: it can reflect potential common shares from convertible notes and other instruments, not just shares already trading.
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A positive BTC Yield means bitcoin holdings grew faster, on a percentage basis, than the assumed diluted share count over the measurement period. It does not guarantee that a common shareholder made money. Bitcoin’s price can fall, financing costs can rise and the stock can trade at a premium or discount to the value of the company’s bitcoin and other assets.
BTC Yield is also not the same as a return on equity, earnings growth or cash return. It is a capital-structure and bitcoin-per-assumed-share measure selected by the company. Investors should examine the underlying bitcoin acquired, shares issued or assumed, debt, preferred claims and cash costs rather than relying on the percentage alone.
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Common-stock dilution
Class A ATM sales increase the number of common shares immediately. Convertible notes can increase the share count when converted and are included in assumed diluted shares before that point. More shares do not automatically destroy value if the cash raised buys assets worth more than the economic cost of issuance, but they reduce each existing share’s proportional ownership.
Senior claims and payment priority
Convertible notes and preferred securities rank ahead of common equity. Interest on notes and dividends on preferred stock must be considered before measuring what remains for common holders. In a liquidation, senior instruments may have claims on bitcoin and other assets before common stock receives anything.
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Shareholders are exposed not only to the total number of bitcoin Strategy owns but also to bitcoin per share after all actual and assumed claims are considered. A financing can increase total holdings while reducing bitcoin exposure per assumed diluted share if the company issues too much capital relative to the bitcoin it acquires and the obligations it creates.
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The risks that determine whether the strategy works
Bitcoin-price risk
A decline in bitcoin’s price reduces the market value of the reserve asset while debt principal, interest and preferred dividends remain contractual or senior claims. The balance-sheet effect can be amplified because financing costs do not fall automatically with bitcoin.
Strategy-share-price risk
ATM economics depend on the market price of Strategy shares. A high share price can let the company raise a target amount with fewer shares; a lower price requires more issuance. The share price also affects the likelihood and economics of convertible-note conversion.
Financing-market access
The strategy depends on the ability to sell common or preferred securities and issue or refinance notes. Market access is not guaranteed. If investors demand higher returns, ATM demand weakens or maturities approach during a difficult market, the company may need to slow purchases, sell assets, raise capital on less favorable terms or devote more cash to debt and dividend obligations.
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Interest, dividends and reserve requirements
Strategy reports interest and preferred dividends as cash requirements. It has also used equity proceeds for those obligations and its USD Reserve. That means a financing round can support liquidity without increasing bitcoin holdings by the full amount raised.
Maturity and refinancing risk
Each note has a maturity and terms governing conversion, settlement and repayment. Notes that do not convert still require a solution at maturity. Refinancing can be expensive or unavailable, particularly if bitcoin and Strategy’s share price have fallen together.
How to analyze a new financing announcement
- Identify the instrument. Determine whether the transaction is common stock, a convertible note, preferred stock or a combination.
- Separate gross and net proceeds. Use net proceeds after underwriting discounts, fees, redemptions or other uses when estimating cash available for bitcoin.
- Read the stated use of proceeds. Check how much is allocated to bitcoin and how much supports debt repayment, interest, dividends, reserves or general corporate purposes.
- Measure immediate shares. For a common ATM or equity offering, calculate the new shares issued relative to the existing Class A share count.
- Model assumed dilution. Add potential conversion shares and other dilutive instruments where the company includes them in diluted-share measures.
- Map senior claims. Record note principal, maturities, interest, preferred dividends and liquidation preferences before evaluating common-equity value.
- Compare bitcoin per assumed share. Test whether the bitcoin acquired grows faster than the fully diluted share base, while recognizing that BTC Yield is only one metric.
- Stress-test prices and access. Examine lower bitcoin prices, a lower Strategy share price, higher financing costs and an inability to refinance at maturity.
Bottom line for readers
Strategy keeps buying bitcoin by combining excess cash with repeated capital-market raises. Common-stock ATMs provide flexible cash but dilute holders immediately. Convertible senior notes add debt, interest and maturity obligations with potential conversion dilution. Preferred stock can avoid immediate common-share issuance, yet it carries dividends and senior claims ahead of common equity. The program succeeds for common shareholders only if the value and growth of bitcoin acquired outweigh the costs and dilution of the financing used to acquire it.
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