Recently, Bitcoin has experienced a phased rise, with a cumulative increase of 20% from its low in February, and the current trading price is stable at around $76,000. All parties in the market are generally concerned about whether this round of rebound can continue. Bitwise provides the core answer: the key driving force behind the current rise in BTC is Strategy's continuous increase in its holdings of Bitcoin through its perpetual preferred stock product STRC, and this momentum of purchasing Bitcoin is likely to continue in the coming period.

It is undeniable that there are multiple supporting factors for the current BTC rebound - since March 1st, the cumulative net inflow of Bitcoin ETFs has reached $3.8 billion, and the repurchase demand from long-term position investors has also continued to be unleashed. However, the single most core driving force remains Strategy. Data shows that over the past eight weeks, the company has accumulated a total of $7.2 billion worth of Bitcoin, and the core source of funds for purchasing Bitcoin is precisely the funds raised from the issuance of perpetual preferred shares STRC. To determine whether the upward momentum of BTC can be sustained, it is essentially necessary to clarify the product mechanism of STRC, Strategy's logic for purchasing Bitcoin, and the sustainability of this model.

First, let's clarify the core: What is STRC? STRC stands for Strategy's issued Sustainable Preferred Stock. As a hybrid financial instrument, it possesses the dual attributes of bonds and stocks. Strategy has two core objectives for issuing this product: one is to stabilize the STRC share price at $100 per share, and the other is to provide investors with high dividend returns. Currently, its annualized return rate has reached 11.5%. To anchor the target price at $100, Strategy has established a dynamic dividend adjustment mechanism: when the STRC price falls below $100, the dividend rate is increased to attract new buyers; when the price is above $100, additional shares are issued or the rate is reduced to guide the share price back to the target price level. Since its listing in July 2025, STRC has generally maintained its pricing target of $100, with occasional deviations but they are manageable. To stabilize the share price, Strategy has gradually increased the initial annualized interest rate from 9% to the current 11.5%.

The core intention behind the issuance of STRC by Strategy is not simply to raise funds, but to continuously increase its holdings of Bitcoin. The vast majority of the funds raised through the issuance of STRC will be directly used to purchase BTC on the open market, which is also the core logic behind the current rise in BTC prices. The question that the market is most concerned about is: how does Strategy support the high dividend payment of 11.5%? The logic behind this can easily be misunderstood as a "Ponzi scheme," but it is not actually the case - STRC has real underlying asset support, which is the huge amount of Bitcoin holdings held by Strategy.

From the perspective of asset-liability structure, Strategy currently holds Bitcoin worth $63 billion, with liabilities of $8 billion and preferred shares totaling $14 billion, forming a solid safety buffer. In the corporate capital liquidation priority, preferred shares rank higher than common shareholders, which means that if the company enters liquidation, it will first repay the $8 billion in debt, then redeem the $14 billion in preferred shares, and only the remaining assets of approximately $41 billion will belong to common shareholders. This structure also determines that STRC is not a "tree without roots," and its high returns are backed by real assets.

So, will Strategy face a situation where funds dry up and dividends cannot be paid? The answer depends on the price performance of Bitcoin. Based on the current BTC price, the company's book funds are theoretically sufficient to continue paying dividends for 42 years. If Bitcoin's price remains stagnant for a long time, it is expected that the company will fall into crisis by 2068; however, if Bitcoin can maintain a 20% annual increase, it can theoretically cover dividend payments permanently. It should be added that under certain conditions, Strategy can suspend dividend payments, but the dividend liabilities payable will continue to accumulate compound interest, treated as normal interest accrual, which also provides some flexibility for its capital turnover.

Of course, risks also exist objectively, with the core variables focusing on the issuance scale of STRC and the price volatility of Bitcoin. Other things being equal, the larger the issuance volume of STRC, the higher the dividend liability, and the company's default risk will also increase accordingly; but at the same time, the book gains brought by the rise in Bitcoin prices will strengthen the company's balance sheet, thereby hedging this risk. In short, investors buying STRC are essentially betting that Strategy can strike a balance and will not unrestrainedly issue more STRC, ultimately triggering a debt crisis.

Getting back to the core issue: Will Strategy continue to issue more STRC and increase its holdings of Bitcoin? Bitwise believes that the probability is high. Looking at the market environment, the current yield on junk bonds is less than 7%, and private credit funds continue to flow out. However, STRC's high annualized yield of 11.5%, backed by over $40 billion in Bitcoin assets as a safety buffer, is extremely attractive to investors. Market rumors indicate that Strategy could have raised more funds in the last round of STRC fundraising, which also implies that its willingness to issue more is not yet saturated.

Specifically, the issuance capacity of STRC primarily hinges on a pivotal metric: the ratio of total liabilities (debt + preferred stock) to the market value of Bitcoin holdings. Currently, this ratio stands at 33%, indicating that $21 billion in total liabilities corresponds to $63 billion in Bitcoin holdings. Once this ratio approaches 50%, investors will collectively begin to question its risk. Based on the current BTC price, Strategy still has an issuance capacity of $10 billion to $15 billion for STRC. Should the Bitcoin price continue to rise, its market value of holdings will increase accordingly, and the fundraising cap will also be further relaxed.

Overall, Bitwise believes that there is ample room and a solid market foundation for the continuous issuance of STRC, and it is highly likely that Strategy's token purchase behavior will continue, providing sustained support for the subsequent trend of Bitcoin. However, two major risks need to be guarded against: First, sharp fluctuations in Bitcoin prices could lead to asset shrinkage for the company and increased pressure on dividend payments. Second, Strategy's excessive issuance of STRC could push up the debt ratio, triggering a market trust crisis. Overall, as long as these two major risks are manageable, the momentum of STRC driving BTC to rise is expected to continue.