Bitcoin treasury companies in the U.S. are facing a tougher funding environment as traditional financing channels narrow and dilution pressure builds. A Bloomberg report dated Oct. 21 said firms such as Strive and Strategy are increasingly turning to high-dividend preferred stock to keep raising cash for additional crypto purchases.
Strive raises $630 million through preferred stock
On Tuesday, Strive said on its official treasury page that it had completed a $630 million preferred stock offering. The final amount was about 25% above the company’s original target.
Using that oversubscription rate, Strive’s initial fundraising goal works out to roughly $504 million, which means the deal brought in about $126 million more than first planned.
To secure demand, the preferred shares were structured with a 15% stated annual dividend and sold at a discount. That pushed the effective annualized yield for investors in the secondary market to nearly 17%.
Against the U.S. Treasury’s daily yield curve data, with the one-year Treasury benchmark at about 4.2%, Strive’s spread comes to nearly 1,300 basis points. The return profile is approaching levels typically associated with distressed debt.
Strategy’s preferred stock channel loses momentum
Strategy, described in the report as the largest corporate bitcoin holder, is also showing signs that its capital flywheel is slowing. Activity reflected on Nasdaq’s dedicated MSTR trading page points to mounting strain in the company’s financing model.
Its STRC preferred stock, which carries a 12% annual dividend, has been stalled since its secondary-market price fell in June. Management is now seeking to introduce a daily dividend mechanism in an effort to bring liquidity back.
With preferred issuance running into resistance, Strategy has continued to rely on large at-the-market common stock sales to raise money for bitcoin purchases. That leaves existing common shareholders facing continued dilution.
Higher funding costs are testing the treasury model
According to tracking from Bitcoin Treasuries, the core logic behind listed companies using financial leverage to accumulate crypto is simple: borrow cheaply and seek stronger upside from the asset side of the balance sheet.
Once funding costs rise into the 15% to 17% range, bitcoin’s long-term compounded gains have to outpace those double-digit fixed financing costs. If they do not, the pressure falls directly on corporate cash flow.
The report said the shift from zero-coupon convertible debt to high-yield preferred stock shows how aggressively U.S.-listed crypto treasury companies have evolved. It also leaves their balance sheets more dependent on a one-way bull market in crypto.