Strategy Buys $27M Bitcoin Before Price Plunge

Strategy’s recent Bitcoin acquisition reveals a significant timing misstep in the volatile cryptocurrency markets. The company purchased 220 Bitcoin at an average price of $123,500 last week, a figure that aligns closely with Bitcoin’s all-time high levels reached earlier in the week rather than the lower prices that followed Friday’s market decline. By Monday, Bitcoin’s price had settled around $115,000, representing an 8% weekly decline that left Strategy’s latest purchase immediately underwater.

The purchase timing is particularly notable given that Bitcoin’s price ranged between $126,000 and $110,000 throughout the week, suggesting Strategy bought near the top of that range. This marks a stark contrast to other periods this year when the company has unveiled weekly Bitcoin purchases costing as much as $2.46 billion, demonstrating how the firm’s acquisition strategy has shifted amid changing market conditions and funding constraints.

Strategy’s latest Bitcoin purchase was entirely funded through preferred share offerings, a funding mechanism that has consistently resulted in smaller acquisitions compared to periods when the company issues common shares. The $27 million raised came from three separate preferred share offerings: $1.7 million worth of STRK, $17.1 million worth of STRF, and $6.9 million worth of STRD. Some of these preferred shares receive dividend payments, representing an additional cost that common share offerings don’t carry.

The shift toward preferred share funding coincides with a dramatic reduction in Strategy’s stock premium relative to its Bitcoin holdings. According to research from NYDIG’s Global Head of Research Greg Cipolaro, Strategy’s stock price fell 20.3% in the third quarter while Bitcoin gained 6.2%. This performance gap caused Strategy’s stock to decline from trading at an 86% premium to its Bitcoin holdings to just a 39% premium, making common share issuance less lucrative for funding additional Bitcoin purchases.

Market data from Yahoo Finance showed Strategy’s shares trading around $304.78 on Monday, representing a 15% decline over the past five trading days. This stock performance contrasts with Bitcoin’s more modest decline and highlights the challenges Strategy faces in maintaining investor enthusiasm for its Bitcoin-focused strategy.

The corporate Bitcoin treasury space has become increasingly crowded this year, with Strategy now facing meaningful competition from newer entrants. According to NYDIG’s research, only one Bitcoin treasury firm outperformed Bitcoin itself in the third quarter—Empery Digital, which surpassed Bitcoin’s 6.2% gain while Strategy’s stock declined significantly. This competitive pressure comes as what began as a balance sheet investment with Strategy in 2020 has “morphed into a full-blown industry of public companies whose nearly entire objective is to own one crypto or another,” as Cipolaro noted in his recent report.

Despite the challenging environment, Strategy maintains its position as the world’s largest corporate Bitcoin holder with 640,250 Bitcoin in its treasury, worth approximately $73 billion based on current prices according to crypto data provider CoinGecko. The latest purchase, though relatively small, still lifted the average cost of Bitcoin in Strategy’s stockpile above the $74,000 mark, reflecting the firm’s continued commitment to accumulating the cryptocurrency even at elevated prices.

Broader market factors also played a role in last week’s Bitcoin price movements, with trade tensions between the U.S. and China contributing to market volatility. The situation prompted U.S. President Donald Trump to post “Don’t worry about China” on Truth Social on Sunday, attempting to calm markets after his earlier threats of steeper levies sparked a global sell-off. Strategy co-founder and Executive Chairman Michael Saylor added his perspective on X, writing “No tariffs on Bitcoin” on Friday as markets began their decline.

While Bitcoin showed some recovery by Monday, climbing back from its Friday lows, altcoins experienced even greater losses during the same period. This differential performance highlights Bitcoin’s relative resilience during periods of market stress, though Strategy’s recent purchase timing suggests even the largest corporate holder can misjudge short-term price movements in the notoriously volatile cryptocurrency markets.