Why Strategy Continues to Increase Bitcoin Holdings: In-Depth Analysis of Long-Term Investment Logic

By Bradley Peak, Source: Cointelegraph, Compiled by Shaw Jinse Finance. Michael Saylor's Bitcoin Strategy. Michael Saylor's goal is to redefine corporate treasury management. Since August 2020, his company (MicroStrategy, now known as Strategy) has become one of the largest public holders of Bitcoin. By September 2025, Strategy had accumulated 640,031 Bitcoins, valued at over $73 billion. With an average purchase price in the tens of thousands of dollars, the company has considerable unrealized gains at current levels.

For Saylor, Bitcoin is both a hedge against inflation and a reserve asset that won’t depreciate—a way, he argues, to get ahead of future institutional flows.

His argument is compelling: if Wall Street allocated 10% of its assets to Bitcoin, its price could climb to $1 million.

Bitcoin is the optimal reserve asset

Seller’s strategy is simple but unwavering: accumulate Bitcoin, hold it indefinitely, and embed it into the company’s structure. Since 2020, Strategy has continuously acquired Bitcoin using excess cash, debt financing, and equity financing. The firm currently holds 640,031 Bitcoins (approximately 3% of the total Bitcoin supply) at an average purchase cost of approximately $73,983. To build its Bitcoin reserve, Strategy has utilized a variety of financing instruments: zero- or low-interest convertible bonds, preferred stock, at-the-market equity offerings, and other tools designed to raise capital while limiting shareholder dilution. Volatility is viewed not as a risk to be avoided but as an opportunity—buy on dips, hold during turbulent times, and let Bitcoin's scarcity function over time. The conviction behind this accumulation stems from Thaler's view of Bitcoin itself. He calls cash a "melting ice cube" because inflation will gradually erode its value. Unlike cash, Bitcoin's supply is capped at 21 million, enforced by code and halving events, making it increasingly scarce. Unlike gold—which is expensive to store, transport, and authenticate—Bitcoin is digital, borderless, and secured by a decentralized network, making it more resistant to political interference. He also sees Bitcoin as a diversification tool. Its weakened correlation with stocks and bonds gives it a hedge-like quality in an environment of high inflation or aggressive central bank monetary easing. For Saylor, these characteristics make Bitcoin an ideal reserve asset: scarce, portable, risk-resistant, and built for 2025 and beyond. The Road to $1 Million: Saylor's Bitcoin Prediction Explained Saylor's boldest claim is that Bitcoin could eventually reach $1 million per coin. This starts with institutional capital: pension funds, insurance companies, mutual funds, and asset managers collectively control over $100 trillion. If even 10% of this capital (roughly $10 trillion to $12 trillion) flowed into Bitcoin, the price impact would be enormous. With a fixed supply of 21 million, this demand alone would imply a valuation of nearly $475,000 per Bitcoin. However, Saylor believes the actual effective supply is much smaller. The number of Bitcoins believed to be permanently lost is between 2.3 million and 3.7 million (some estimates put the number even higher). Meanwhile, the "old" Bitcoin supply (those unspent for seven years or longer), combined with corporate reserves, accounts for approximately 24% of the total supply. Furthermore, over 72% of the circulating Bitcoin is currently considered illiquid, held by long-term holders and entities with little to no sales history. These factors combine to leave only a small fraction of Bitcoin truly circulating on the open market. When recalculated based on a liquid supply of 16 to 18 million Bitcoins, the same allocation of $10 to $12 trillion raises the implied price range to $555,000 to $750,000. Over time, as institutional assets grow, or as allocations exceed 10%, the million-dollar threshold becomes apparent. However, Saylor noted that this process won't happen overnight. Regulatory approvals, risk committees, and liquidity constraints mean institutional allocations will be slow. How Strategy Funds Its Bitcoin Reserves

Over the past few years, Strategy has relied heavily on convertible bonds, preferred stock, and innovative equity offerings to fund each new batch of Bitcoin.

Convertible Senior Notes

A core pillar is the issuance of convertible senior notes, which are convertible into equity under certain conditions. These transactions typically carry very low interest rates, or even zero (zero coupon), minimizing cash costs. For example, in mid-2024, Strategy raised $800 million (approximately $786 million net) through a convertible bond offering with a 35% conversion premium. The funds purchased 11,931 bitcoins at an average price of $65,883. Shortly thereafter, another transaction valued at approximately $600 million was executed. These structures provide flexibility by locking in current capital while deferring potential equity dilution until conversion. Preferred Stock and "Deferred" Offerings In addition to debt financing, Strategy has also attracted investors by issuing preferred stock. These offerings typically offer higher yields than regular bonds and are less structured with covenants. For example, Strategy recently issued "Stretch" (STRC) preferred stock, which offers a floating dividend of approximately 9% annually, with the explicit intention of using the proceeds to purchase Bitcoin. In July 2025, Strategy increased its planned $500 million Stretch preferred stock offering to $2 billion, highlighting investor demand. Insiders also participated in the offering, which offered an 11.75% yield, demonstrating strong investor appetite for guaranteed income. Recent Acquisitions The most recent publicly disclosed acquisition occurred in September 2025, when Strategy purchased 196 Bitcoins at an average price of $113,048, totaling approximately $22 million. Like recent acquisitions, this acquisition was funded through common stock sales and preferred stock issuances, rather than operating cash flow or the sale of existing Bitcoin.

Risks, criticisms and next steps

Strategy has become the largest corporate Bitcoin holder, but this comes with trade-offs.

The company currently operates like a leveraged Bitcoin fund, with its share price closely tracking Bitcoin's movements. As it pays for new Bitcoin purchases through equity, convertible bonds and preferred stock, existing shareholders face the risk of dilution.

In addition to these risks, analysts also point to:

• Regulatory risk: Changes in tax or accounting rules could weaken the case for holding Bitcoin.

• Opportunity cost: Billions of dollars are locked up in a volatile asset.

• Uncertainty about institutional demand: The $1 million argument relies on Wall Street funds actually allocating 10%.

Nevertheless, its broader implications cannot be ignored. The strategy has helped normalize Bitcoin on corporate balance sheets and accelerated the growth of custody services, exchange-traded funds (ETFs), and the institutional over-the-counter market.

What to watch next:

• Strategy’s future financing methods and funding structure

• Regulatory clarity on Bitcoin accounting and taxation

• Signs of large asset managers shifting their physical assets under management into Bitcoin.

If these trends continue, Saylor’s bet could reshape corporate financial strategies and Bitcoin’s role in global finance.