Strategy’s $7.2 Billion Bitcoin Buying Spree Seen as Main Driver of Recent Rally

Strategy’s large-scale purchases have emerged as the biggest driver of Bitcoin’s recent rebound.

Cointelegraph reported on April 29 that Bitwise Chief Investment Officer Matt Hougan wrote in a report that several factors have supported Bitcoin’s recent gains, including inflows into spot exchange-traded funds and accumulation by long-term holders. He said Strategy’s buying was the single biggest contributor.

Over the past eight weeks, Strategy has bought about $7.2 billion of Bitcoin, according to Hougan. That is more than the roughly $3.8 billion of net inflows into US spot Bitcoin ETFs over the same period.

Strategy is the largest publicly traded corporate Bitcoin investor, with holdings of about 818,334 BTC. Over the past week, Bitcoin has traded in a range of about $75,000 to $79,000, leaving it up about 20% from its February low.

Those purchases have been funded with proceeds from the company’s STRC perpetual preferred stock issuance. The security offers a fixed dividend, and the company says most of the money raised is used to buy Bitcoin.

Hougan said STRC’s 11.5% yield is an attractive alternative at a time when even low-rated corporate bonds yield less than 7%. He added that Strategy may be able to raise billions of dollars more.

A continued rise in Bitcoin would further support the sustainability of those dividends. Based on current prices, Hougan said dividend payments could continue for more than 40 years. If Bitcoin keeps rising by about 20% a year, the payments could effectively continue indefinitely.

The market has also raised the possibility that, if this buying pace continues, Strategy’s holdings could approach the estimated Bitcoin stash of creator Satoshi Nakamoto.

Galaxy Digital Head of Research Alex Thorn said Strategy’s holdings could come close to Satoshi’s within two years if the current trend is maintained.