MicroStrategy has again bulked up its bitcoin treasury and raised fresh capital, but the cost of this strategy is climbing sharply.
The Bitcoin treasury firm now holds roughly 641,000 bitcoins – around $70.9 billion at recent prices, and emphasizes it will not sell these assets.
Instead, MicroStrategy funds new bitcoin purchases by issuing equity and high-yield preferred stock (STRK, STRF, STRD, STRC, STRE) through IPOs and at-the-market programs.
At the same time, investors are valuing the MSTR stock at a modest premium to the underlying bitcoin.
The shares trade at about 1.07× MicroStrategy’s reported bitcoin value (roughly a 7% premium) and around 1.3× on an enterprise basis.
The company’s recent disclosures make clear that amplifying the bitcoin balance sheet is driving both eye-catching profits and growing obligations.
Bitcoin Holdings and Treasury Yield
As of late October 2025, MicroStrategy’s bitcoin holdings stood at 640,808 coins acquired for $47.4 billion.
The firm targets a high “Bitcoin Yield” (accretive bitcoins per share) and has achieved about a 26.0% BTC Yield year-to-date, aiming for roughly 30% by year-end.
Most of the gains in 2025 have been unrealized. From January 1 through Oct. 24, MicroStrategy reported roughly $12 billion of operating income – essentially all from rising bitcoin valuations – whereas its traditional software revenues for the first nine months were only about $354 million.
In other words, almost all of MicroStrategy’s profit in 2025 has come from paper gains on bitcoin. This heavy reliance on bitcoin appreciation has boosted operating income.
For example, Q2 operating income was roughly $14.0 billion and Q3 added about $3.9 billion, even while legacy software sales remained modest, about $128.7 million in Q3, with total revenues for nine months under $355 million.
Ballooning Debt, Dividends and Financing Costs
MicroStrategy’s decision to not sell bitcoin means it must service growing debt and dividend obligations. As of Oct. 24, 2025 the company’s annualized burden of debt interest and preferred dividends was about $689 million.
This figure includes roughly $35 million of interest on convertible notes and roughly $654 million of cumulative dividends on issued preferred stock.
The total obligation is rising each month as more preferred shares come to market. According to company estimates, these servicing costs will grow into the “billions of dollars” in future years.
In effect, every new share issuance that funds bitcoin purchases also increases the annual dividend bill.
Management notes that expanded bitcoin buying via preferred equity and at-the-market offerings now adds “tens if not hundreds of millions” more in dividend obligations.
MicroStrategy Equity Issuance and Capital Raising Strategy
MicroStrategy’s capital markets platform has been highly active in 2025. CEO Phong Le reported raising about $20 billion year-to-date through equity offerings.
For example, in the second quarter the company issued over $10 billion of new securities via at-the-market common stock programs and preferred-stock IPOs.
New issues include an 8.0% strike preferred (STRK), a 10.0% strife preferred (STRF), and the 10.0% “Stride” preferred (STRD), plus the July 2025 IPO of the 10%-coupon “Stretch” preferred (STRC).
These securities are typically marketed as higher-yield credit-like products. Net proceeds from each issuance have largely been used to purchase more bitcoin for the treasury.
MicroStrategy has stated it will continue this capital-raising approach rather than selling any of its bitcoin.
On its recent earnings calls, management reaffirmed guidance to fund bitcoin accumulation almost entirely through stock and preferred offerings under approved at-the-market programs.
Can Michael Saylor’s Treasury Model Survive Mounting Cash Demands?
The upshot of the bitcoin strategy is a dramatic divergence between balance-sheet gains and income statement reality.
MicroStrategy reported operating income of about $14.0 billion in Q2 2025 and $3.9 billion in Q3, driven by fair-value accounting of its 640,808 bitcoins.
In contrast, its core software business remains a small part of the story. Nine-month software revenues were just $354 million, up only modestly year-over-year.
Meanwhile, the cost of maintaining the bitcoin treasury is steep: annual interest and dividends are roughly $689 million and climbing.
As CEO Phong Le pointed out, MicroStrategy’s “transparent, scalable” collateral of bitcoin enables its digital credit model, but it also creates outsized volatility and cost.
Every additional $1 of preferred stock issued to buy bitcoin increases future dividend expense.
Investors have so far given MicroStrategy’s equity a modest valuation boost. The common stock trades at roughly a 7% premium to the value of its bitcoin per share.
On an enterprise value basis – including debt and preferred shares – the stock’s valuation is closer to ~1.3× underlying bitcoin value.
This premium reflects confidence that the company can leverage its large bitcoin holdings to issue attractive new credit securities.
Yet shareholders bear the risk of an increasing cash drain. With dividend and interest costs already near $0.7 billion a year and forecasts pointing to “billions” of dollars as the asset base grows, MicroStrategy’s strategy imposes rising financial obligations on its balance sheet.
In sum, the company’s commitment to “never selling” bitcoin has created one of the most bullish corporate narratives in crypto – but also one of the heaviest financing burdens on the trading floor.