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

Zhu Taizhu, Golden Finance

Summary

Strategy and BitMine both increased their BTC and ETH holdings significantly last week. STRC is Strategy’s core tool for raising funds to buy BTC; equity financing and staking yield are the two main channels that support BitMine’s ongoing accumulation of ETH.

In today’s sluggish crypto market, the two major crypto treasuries are still adding to their crypto holdings. Strategy spent $2.54 billion last week to purchase 34,164 Bitcoins, and its total BTC holdings have now reached 815,061 BTC. BitMine added more than 100,000 ETH last week, bringing its total holdings to over 4.97 million ETH.

How are Strategy and BitMine able to carry out continuous buying plans?

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 Bitcoins between April 13 and 19 for a total consideration of $2.54 billion. This is the third-largest Bitcoin acquisition in Strategy’s history, after it purchased 55,500 BTC and 51,780 BTC in November 2024.

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?

In early April 2026, Strategy founder Michael Saylor publicly asserted that Bitcoin’s “four-year halving cycle” has ended. He believes the price is now driven by capital flows rather than a supply shock caused by halving.

Saylor’s outlook for 2026 is especially notable: he believes 2026 will be the last year in which people can buy Bitcoin at a price below $100,000.

Strategy’s buying volume has already far exceeded Bitcoin’s issuance rate, which means Strategy continues to consume the BTC supply held in circulating markets. Changes in supply and demand will also place Strategy in a logic of “the more it buys, the scarcer BTC becomes, and the more valuable the company becomes.”

2. Where does Strategy’s money come from?

STRC provides more than 85% of the funding for this acquisition.

As with the most recent acquisitions, most of the funding for Strategy’s latest purchase also comes from STRC.

According to the submitted filing, STRC generated $2.18 billion in earnings, accounting for about 85.7% of total earnings, while the sale of Class A common stock (MSTR) contributed $366 million.

As a floating-rate perpetual preferred stock, STRC is Strategy’s core tool for raising funds to buy BTC. Its par value is $100, and as of April 2026 its floating annualized dividend rate is 11.5%, adjusted monthly. It is mainly aimed at investors who seek stable cash flow and are optimistic about Bitcoin’s long-term trajectory. Since its launch in July 2025, STRC has become a key support for Strategy’s BTC accumulation—its peak daily capacity can fund the purchase of over 4,000 BTC; its highest weekly amount can push more than 7,000 BTC into accounts, far exceeding daily new mining supply.

The STRC ex-dividend date passed last Wednesday. This means investors who buy this dividend-paying product will no longer receive the next dividend payment. Prior to reaching this threshold, STRC’s stock price stayed at $100 or above for 10 consecutive trading days. Demand remains strong for this preferred stock, which currently has a market value of $8.5 billion.

Research firm Damped Spring Advisors founder Andy Constan believes: “The surge in STRC demand mainly comes from dividend arbitrage traders. These traders typically buy the stock before the ex-dividend date and sell shortly after the ex-dividend date. ‘The people I know were all using leverage to go long on STRC last night. None of them has ever done dividend arbitrage in their lives.’”

2. BitMine increases its holdings by more than 100,000 ETH

On April 20, according to BitMine’s report, the company’s crypto holdings include 4,976,485 ETH at a unit 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. BitMine’s holdings of Ethereum represent 4.12% of the total Ethereum supply (120.7 million ETH).

1. Why keep buying ETH?

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

“We are seeing more and more signs that the ‘mini crypto winter’ is coming to an end. As the downside risk from the U.S.-Iran war diminishes, ETH has risen 41% from its early-February lows. 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 crude oil prices). In our view, Ethereum is the best ‘wartime store of value,’ and it has been a leading asset since the war began—this is truly significant. Over the past four weeks, BitMine has continued to speed up its ETH purchases because our basic expectation is that ETH is in the final stage of the ‘mini crypto winter.’ Last week, we purchased 101,627 ETH, the highest weekly purchase rate since the week of December 15, 2025.”

Second, Ethereum continues to benefit from two major tailwinds: Wall Street tokenizing on-chain assets and growing demand for agentic artificial intelligence systems built on public and neutral blockchains. By 2026, public blockchains will become a necessary condition for autonomous AI agents to run, and these agents require neutral and decentralized payment channels. By controlling 4.21% of the ETH supply, BitMine effectively holds a substantial portion of the “computing space” on which these systems rely.

2. Where does BitMine’s money come from?

BitMine’s funding sources differ from Strategy’s; it mainly relies on two channels: equity financing and staking yields.

According to the 10-Q filing submitted by BitMine on April 14, the number of its common shares increased from 232 million between August 31 and February 28 to nearly 494 million shares. Additional paid-in capital jumped from $8.36 billion to $18.55 billion, and all of these funds were invested in Ethereum.

Bitmine also staked most of the ETH it holds to generate passive income. As Bitmine disclosed, 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, Bitmine’s total staked ETH was 3,334,637 ETH (calculated at $2,301 per ETH, totaling $770 million). Tom Lee said: “Bitmine’s staked ETH exceeds that of any other institution in the world. When all of Bitmine’s ETH is staked through MAVAN and its staking partners, it is expected to earn $330 million in ETH staking rewards annually (based on a 2.88% 7-day BMNR yield). Currently, BitMine’s annualized staking income is $221 million.”

In sum, BitMine finances itself by issuing additional shares in the capital markets and generates cash flow by staking ETH—thereby enabling its hoarding strategy of continuously buying ETH.