Why do Strategy and BitMine have a continuous flow of funds accumulating coins?

Tao Zhu, Golden Finance

Summary

Strategy and BitMine both increased their holdings of BTC and ETH significantly last week. STRC is Strategy’s core tool for raising funds to buy BTC; equity financing and staking yields are the two main channels supporting BitMine’s continuous ETH purchases.

In the current sluggish crypto market, the two major crypto treasuries are still increasing their crypto assets. Strategy spent $2.54 billion last week to buy 34,164 Bitcoin, bringing its total holdings to 815,061 BTC; BitMine increased its ETH holdings by over 100k last week, with a total of more than 4.97 million ETH.

How do Strategy and BitMine achieve their continuous buying plans?

1. Strategy continues to buy $2.54 billion worth of BTC

According to an 8-K filing submitted to the U.S. Securities and Exchange Commission on April 20, Strategy acquired 34,164 Bitcoin between April 13 and 19 at a cost of $2.54 billion. This is Strategy’s third-largest Bitcoin acquisition ever, after purchasing 55,500 BTC in November 2024 and 51,780 BTC.

The average price of the newly purchased BTC was $74,395 per BTC, slightly below the company’s average acquisition price of $75,527.

1. Why continue buying BTC?

Strategy founder Michael Saylor publicly stated in early April 2026 that the “four-year halving cycle” for Bitcoin has ended. He believes that current prices are driven by capital flows rather than supply shocks from halving events.

Saylor’s outlook for 2026 is particularly noteworthy; he believes 2026 will be the last year people can buy Bitcoin below $100k.

Strategy’s buying volume has already far exceeded BTC’s production rate, continuously consuming the circulating BTC supply in the market. Changes in supply and demand will also make Strategy’s holdings increasingly scarce and the company more valuable.

2. Where does Strategy’s money come from?

Over 85% of the funds for this purchase were provided by STRC.

Similar to recent acquisitions, most of Strategy’s latest purchase funds came from STRC.

According to the submitted documents, STRC generated $2.18 billion in revenue, accounting for about 85.7% of total income, with Class A common stock (MSTR) contributing $366 million from sales.

STRC, as a floating-rate perpetual preferred stock, is Strategy’s core tool for raising funds to buy BTC. It has a face value of $100, with a floating annual dividend rate of 11.5% as of April 2026, adjusted monthly. It mainly targets investors seeking stable cash flow and optimistic about Bitcoin’s long-term prospects. Since its launch in July 2025, STRC has become a key support for Strategy’s BTC accumulation, with a peak daily capacity to fund over 4,000 BTC purchases and a weekly maximum of over 7,000 BTC, far exceeding the new mining supply each day.

The ex-dividend date for STRC was last Wednesday, meaning investors who buy this dividend-paying product will no longer receive the next dividend payment. Before reaching this threshold, STRC’s price has remained at or above $100 for 10 consecutive trading days, reflecting strong demand for this $8.5 billion market cap preferred stock.

Research firm Damped Spring Advisors founder Andy Constan believes: “The surge in STRC demand mainly comes from dividend arbitrage traders, who typically buy the stock before the ex-dividend date and sell shortly after. ‘Everyone I know who’s involved in this last night used leverage to go long STRC—they’ve never done dividend arbitrage before in their lives.’”

2. BitMine increased ETH holdings by over 100k

On April 20, according to BitMine’s report, the company holds 4,976,485 ETH at an average price of $2,301; 199 BTC; $200 million worth of Beast Industries shares; $107 million worth of Eightco Holdings shares; and a total of $1.12 billion in cash. ETH accounts for 4.12% of the total ETH supply (120.7 million ETH).

1. Why keep buying ETH?

First, BitMine Chairman Tom Lee believes the current bear market is about to end, prompting the company to accelerate ETH purchases.

“We see increasing signs that the ‘mini crypto winter’ is ending. As the risk of escalation in the US-Iran conflict diminishes, ETH has risen 41% from its lows in early February. Since the outbreak of the war, Ethereum has outperformed the S&P 500 by 2,280 basis points and remains the best-performing single asset globally (excluding oil prices). In our view, Ethereum is the best ‘wartime store of value,’ and has been a leading asset since the conflict began, which is significant. Over the past four weeks, BitMine has accelerated ETH purchases, as our fundamental expectation is that ETH is in the final stage of the ‘mini crypto winter.’ Last week, we bought 101,627 ETH, the highest weekly purchase rate since the week of December 15, 2025.”

Second, Ethereum continues to benefit from Wall Street’s increasing demand for tokenization on blockchain and the rising need for neutral, decentralized blockchain platforms for AI systems. By 2026, public blockchains will be essential for autonomous AI agents, which require neutral and decentralized payment channels. BitMine, controlling 4.21% of ETH supply, effectively holds a significant portion of the “computing space” these systems rely on.

2. Where does BitMine’s money come from?

BitMine’s funding sources differ from Strategy’s, mainly relying on equity financing and staking yields.

According to a 10-Q filing submitted on April 14, the company’s common shares increased from 232 million to nearly 494 million between August 31 and February 28. Additional paid-in capital surged from $8.36 billion to $18.55 billion, all invested in Ethereum.

BitMine also staked most of its ETH holdings to generate passive income. The company disclosed that it recently launched MAVAN (Made in America Validation Network)—an institutional staking platform. Some of BitMine’s ETH has been staked on the MAVAN platform.

As of April 20, the total ETH staked by BitMine was 3,334,637 ETH (valued at $2,301 per ETH, totaling $100k). Tom Lee stated: “BitMine’s staked ETH exceeds that of any other institution in the world. When all of BitMine’s ETH is staked via MAVAN and its staking partners, it’s expected to earn $330 million annually in staking rewards (based on a 2.88% 7-day BMNR yield). Currently, BitMine’s annualized staking yield is $221 million.”

In summary, BitMine raises capital through stock issuance and earns cash flow by staking ETH, enabling its continuous ETH accumulation strategy.