How MicroStrategy’s STRC Preferred Stock Fuels Bitcoin’s Mid-Month Rally

Bitcoin’s mid-month rallies have become a recurring pattern in 2024, and market analysts are pointing to a key driver: MicroStrategy’s STRC preferred stock, formerly issued under the ticker MSTRP. The instrument has evolved into a critical liquidity source for the world’s largest corporate Bitcoin holder, creating a predictable demand cycle tied to its dividend schedule.

How STRC Fuels Bitcoin Purchases

The STRC preferred stock pays dividends at month-end, but investors must hold shares by the 15th of each month to qualify. This cutoff has turned the middle of the month into a predictable window of demand, as traders buy STRC ahead of the deadline to secure payouts. Once the stock returns to its $100 par value, MicroStrategy can issue new shares through its at-the-market program and use the proceeds to purchase more Bitcoin.

Data from STRC.live confirms this loop is active this week. STRC has rebounded to par, allowing MicroStrategy to fund the acquisition of over 5,000 Bitcoin before Friday’s next ex-dividend deadline. This mechanism has become a recurring feature of Bitcoin’s spot-market flow, reinforcing STRC’s dominance as the most widely traded preferred equity in the market.

Accelerating Bitcoin Purchases via STRC

The volume of Bitcoin acquired through this funding channel has surged since January. According to K33 Research, MicroStrategy bought:

• 4,467 Bitcoin in January using STRC proceeds
• 22,131 Bitcoin in March
• 46,872 Bitcoin in April

This rapid acceleration highlights how STRC has shifted from a financing tool to a major driver of MicroStrategy’s Bitcoin accumulation strategy.

Market Analysts Weigh In on the STRC-Bitcoin Link

Vetle Lunde, head of research at K33, describes the setup as a mechanical source of demand. He explains that yield-focused investors flock to STRC before the ex-dividend date, helping the stock regain par value. This, in turn, provides MicroStrategy with the market depth needed to issue more shares, which are then converted into spot Bitcoin purchases.

MicroStrategy is now seeking to tighten this cycle further. The company has proposed moving STRC’s dividend schedule from monthly to twice-monthly distributions. The company argues this change would reduce reinvestment delays, improve market efficiency, and create more frequent capital-raising opportunities. However, the shift could reinforce the mid-month buying pattern while increasing the company’s reliance on a higher-cost financing tool.

The Sustainability Question: Can This Model Last?

While STRC is shaping Bitcoin’s near-term market performance, institutional researchers are raising concerns about its long-term sustainability. For much of MicroStrategy’s Bitcoin accumulation history, the company relied on cheaper financing methods. The shift to preferred equity—particularly STRC—carries significantly higher costs, prompting questions about the viability of this strategy as Bitcoin’s price fluctuates and interest rates remain elevated.