Strategy Repurchases $2 Billion in Shares and Ignores Cheap Bitcoin

Strategy, the company founded by Michael Saylor that has become synonymous with corporate Bitcoin accumulation, made a choice that has unsettled part of its investor base. Instead of taking advantage of what could be an attractive price region for Bitcoin, near $82,000, the company directed nearly $2 billion to repurchase its own preferred shares, STRC.

In the latest round, $193 million was spent on repurchases. The company also expanded the authorized program from $2 billion to $3 billion. The question circulating among analysts and investors is straightforward: why spend billions to repurchase a stock that is already trading at $98.99, close to its face value of $100, when Bitcoin may be near significant lows?

Why Saylor Chose to Repurchase STRC Instead of Buying Bitcoin

The repurchase program began in the middle of last year when STRC plummeted to around $70. At that moment, the operation made evident financial sense: buying an asset with a 12% dividend yield for 70 cents was a clear arbitrage. The problem is that the stock has already recovered and is trading above $98. The discount to par is less than 2%.

The speed of the repurchases is also noteworthy. Strategy has less than $9 billion in STRC issued. With nearly $2 billion already repurchased and authorization for another $1 billion, the company is on track to withdraw a significant portion of the stock from circulation. Even so, the 12% yield and the rapid pace of repurchase have not been enough to return STRC to its face value.

"You don't build a trillion-dollar market without investing billions," Saylor said in response to criticism on social media. The phrase summarizes the company's philosophy but does not address the central objection: if the goal is to maximize exposure to Bitcoin, why not buy more Bitcoin?

Last week, Strategy acquired a modest 267 bitcoins. For a company that has previously made purchases of hundreds of millions of dollars in BTC at once, this number is almost symbolic. The treasury strategy in Bitcoin that defined the company's identity seems to have been temporarily sidelined.

Bitcoin at $82,000: Opportunity or Trap

Bitcoin was trading near $82,000 on Monday, up 0.8% in the last 24 hours after briefly touching $83,000 overnight. Ethereum, Solana, and XRP also recorded slight gains.

The macro scenario is ambiguous. The Nasdaq recovered more than 1.8% after a brutal week for technology and artificial intelligence stocks. The S&P 500 rose 0.9%. However, the yield on 10-year U.S. Treasuries rose again, reaching 5.133%, and bets on interest rate hikes at next week's Fed meeting increased to 18%.

For the crypto market, this environment of high interest rates and volatility in equities creates a dilemma. As we analyzed in our financial market coverage, higher rates historically pressure risk assets. At the same time, recent inflation reports in the U.S. have been the worst in months, which paradoxically led investors to seek refuge in fixed-income securities last week.

Saylor's decision may reflect a reading that Bitcoin has not yet found its floor in this cycle, and that preserving the company's capital structure is more important than accumulating more coins at prices that may fall.

Other Companies Accelerate Their Treasuries in Bitcoin and Ethereum

While Strategy slows down, other companies are hitting the accelerator. Metaplanet, listed in Japan, has advanced its expansion strategy in the United States. Shareholders of Super League approved the acquisition proposal by Metaplanet, paving the way for the creation of Superplanet (SUPA), a Bitcoin treasury platform listed in the U.S.

In the operation, Metaplanet will contribute 2,100 BTC from its 44,000 BTC and $2.5 million to obtain a 93.7% stake. The shares will be locked for five years, signaling a long-term commitment. The company plans to grow through non-convertible perpetual preferred shares, expanding its access to the American capital market.

On the Ethereum side, Bitmine continues to accumulate aggressively. In the last week, the company purchased an additional 12,535 ETH, equivalent to about $30.4 million. The company now holds 6.04 million ETH and is only 64,000 tokens away from reaching its goal of controlling 5% of the entire Ethereum supply. At the current pace, this milestone could be achieved in approximately five weeks.

This move by Bitmine is particularly relevant because, as discussed in previous analyses on supply concentration, the ownership of 5% of an asset by a single corporate entity can create significant price pressure dynamics, especially during times of low liquidity.

What This Means for Investors

The divergent behavior of crypto treasury companies reveals an important tension at this moment in the cycle. On one side, Saylor opts to strengthen the financial structure of Strategy by reducing costly liabilities. On the other, Metaplanet and Bitmine bet that current prices represent an accumulation opportunity.

The upcoming midterm elections in the U.S. also come into play. According to analysis from the Schwab Center for Financial Research, there is little evidence that the electoral landscape has a consistent impact on cryptocurrency prices. The bipartisan support for crypto legislation in the United States suggests that even a divided Congress would not necessarily be negative for the sector.

The central point for the investor is that the largest companies in the sector are not in consensus about the short-term direction. When even Saylor prefers to buy back shares rather than purchase Bitcoin, it is worth paying attention to the signals. Not necessarily as an indicator of decline, but as a reminder that risk management matters even for the biggest optimists in the market.

This content is informational and educational and does not constitute investment advice. Past performance is not a guarantee of future results.