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

Cao Zhu, Golden Finance

Summary

Both Strategy and BitMine 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 bearish 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 ETH last week, with a total of over 4.97 million ETH.

How do Strategy and BitMine achieve a continuous buying plan?

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

According to the 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 previously.

The average price of the newly purchased BTC was $74,395 per Bitcoin, 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 the current price is driven by capital flows rather than supply shocks caused by halving.

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 Bitcoin’s production rate, which means Strategy is continuously consuming the circulating BTC supply in the market. Changes in supply and demand will also put Strategy in a position where it becomes increasingly scarce and 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 revenue, 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% in 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 single-day peak funding over 4,000 BTC purchases and a weekly maximum of over 7,000 BTC, far exceeding the daily new mining supply.

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, the STRC stock 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 was leveraged long on STRC last night; 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. The ETH held by BitMine accounts for 4.12% of the total ETH supply (120.7 million ETH).

1. Why continue buying ETH?

First, BitMine Chairman Tom Lee believes the current bear market is about to end, so the company is accelerating its ETH purchases.

“We see increasing signs that the ‘mini crypto winter’ is ending. As the risk of U.S.-Iran conflict diminishes, ETH has risen 41% from its lows in early February. Since the outbreak of the war, Ethereum’s performance 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 it 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 tokenization on blockchain and the growing demand for public and neutral blockchain AI systems. By 2026, public blockchains will become a necessary infrastructure 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 the 10-Q filed on April 14, the number of common shares increased from 232 million on August 31 to nearly 494 million on February 28. Additional paid-in capital surged from $8.36 billion to $18.55 billion, with all these funds invested in Ethereum.

BitMine also staked most of its ETH holdings to generate passive income. It disclosed that it recently launched MAVAN (Made in America Validation Network)—an institutional-grade 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 $7.7 billion). 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 generates cash flow by staking ETH, enabling its continuous ETH accumulation strategy.