Finance

Strategy Scoops Up Bitcoin Before Price Dip: How Did They Fund the $27 Million Purchase?

Strategy bought 220 Bitcoin for $27M before a price drop, holdings now at $73B.

byAndres Castro

October 13, 2025, 5:34 PM

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Executive Summary

Strategy acquired an additional 220 Bitcoin for $27 million at an average price of $123,500, increasing its total holdings to 640,250 Bitcoin valued at approximately $73 billion, with this purchase occurring before a significant market plunge.

The $27 million Bitcoin acquisition was financed through preferred share sales amidst market volatility influenced by U.S.-China trade tensions, with President Donald Trump and Strategy’s Executive Chairman Michael Saylor commenting on the market situation.

Strategy’s stock declined 20.3% in the third quarter, underperforming Bitcoin’s 6.2% rise and reducing its stock’s premium relative to its Bitcoin holdings, reflecting the evolving landscape of public companies focused on cryptocurrency ownership.

The Story So Far

Strategy operates as a corporate entity primarily focused on accumulating Bitcoin, funding these acquisitions through various share offerings that depend on its stock’s premium relative to its holdings. This strategy unfolds within a volatile cryptocurrency market, often influenced by broader economic factors like U.S.-China trade tensions, which can significantly impact both Bitcoin’s price and Strategy’s financial performance.

Why This Matters

Strategy’s continued accumulation of Bitcoin, despite its average cost basis rising and its stock underperforming the cryptocurrency in the last quarter, underscores a persistent long-term conviction in Bitcoin’s value. However, the shift in its funding strategy, moving from common to preferred shares due to a reduced stock premium, indicates an evolving market dynamic where simply holding Bitcoin no longer guarantees the same stock outperformance or ease of fundraising, signaling a more mature and competitive landscape for Bitcoin-focused companies.

Who Thinks What?

Strategy, through its continued Bitcoin acquisitions and Michael Saylor’s comments, demonstrates a strong belief in accumulating Bitcoin as a long-term strategy, seeing it as unaffected by tariffs or broader market volatility.

NYDIG’s Global Head of Research, Greg Cipolaro, highlighted that most Bitcoin treasury firms, including Strategy, recently underperformed Bitcoin’s own rise, suggesting a decrease in the attractiveness of expanding Bitcoin holdings by issuing common shares.

President Donald Trump provided a broader market perspective, advising not to worry about China, which indirectly addresses the market tensions that contributed to Bitcoin’s recent volatility.

Strategy, a prominent corporate holder of Bitcoin, announced it spent $27 million last week to acquire an additional 220 Bitcoin, with the purchases occurring at an average price of $123,500. This acquisition notably took place before the leading cryptocurrency experienced a significant price plunge on Friday, pushing the firm’s total Bitcoin holdings to 640,250, valued at approximately $73 billion.

The Tysons Corner, Virginia-based company’s latest Bitcoin acquisition was among its smaller purchases this year, which have previously reached as high as $2.46 billion in a single week. The recent transaction has elevated the average cost of Bitcoin in Strategy’s extensive stockpile to above the $74,000 mark.

Funding and Market Context

The $27 million purchase was financed through the sale of preferred shares, specifically $1.7 million from STRK, $17.1 million from STRF, and $6.9 million from STRD. This funding method contrasts with periods where the firm issues common shares at a premium to grow its Bitcoin reserves.

Bitcoin’s price on Monday hovered around $115,000, showing a partial recovery from an 8% dip over the past week. This volatility followed heightened trade tensions between the U.S. and China, which triggered a broader market sell-off.

Amid the market uncertainty, President Donald Trump commented on Truth Social, stating, “Don’t worry about China.” Separately, Strategy co-founder and Executive Chairman Michael Saylor addressed cryptocurrency concerns on X, writing, “No tariffs on Bitcoin.”

Performance and Industry Landscape

Despite Strategy’s continued accumulation, a recent report from NYDIG’s Global Head of Research, Greg Cipolaro, highlighted that only one Bitcoin treasury firm, Empery Digital, outperformed Bitcoin’s 6.2% rise in the third quarter. During the same period, Strategy’s stock price saw a 20.3% decline.

This performance shift reduced the attractiveness for Strategy to expand its Bitcoin holdings by issuing common shares, as its stock’s premium relative to its Bitcoin holdings decreased from 86% to 39%. The report noted the evolution of Bitcoin-buying firms, stating, “What started off as a balance sheet investment with MSTR in 2020 morphed into a full-blown industry of public companies whose nearly entire objective is to own one crypto or another.”