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Strategy Builds 2.55 Billion Dollar Cash Fortress — Dividend Coverage Extends to 26 Months
Strategy has dramatically strengthened its balance sheet, boosting cash reserves to 2.55 billion dollars and extending dividend coverage to approximately 25.9 months . The company has also formalized a Bitcoin monetization framework that authorizes up to 1.25 billion dollars in BTC sales to fund dividends, buybacks, and cash reserve building .
The Numbers That Matter
The new Digital Credit Capital Framework, announced on June 28, brings several key changes:
Cash Reserve: Increased to 2.55 billion dollars, covering approximately 17.4 months of preferred stock dividend and interest obligations . A new board policy requires the reserve to maintain at least 12 months of coverage at all times .
Monetization Capacity: The company may sell up to 1.25 billion dollars in Bitcoin to increase its cash reserve, pay dividends and debt costs, and fund stock buybacks . Combined with the existing cash reserve, this gives Strategy roughly 3.8 billion dollars in total dividend coverage .
STRC Dividend Rate: Increased to 12 percent from 11.5 percent, effective for dividend periods beginning July 1 . The rate will be evaluated monthly with the goal of maintaining STRC's trading price in the 99 to 100 dollar range .
Buyback Programs: The board authorized separate 1 billion dollar buyback programs for preferred securities and Class A common stock .
A Significant Turnaround
This represents a major improvement from just weeks earlier. In mid-June, Strategy's cash reserve stood at approximately 1.4 billion dollars, with dividend coverage falling to just 10 months after the company used cash to repay a 1.5 billion dollar convertible bond . The coverage had previously been as high as 24 months before the debt repayment .
The rapid build-up from 1.4 billion to 2.55 billion dollars reflects the company's successful execution of its ATM (at-the-market) equity offering program, along with disciplined cash management .
Maintaining Long-Term Bitcoin Exposure
Executive Chairman Michael Saylor emphasized that the company remains committed to Bitcoin as its primary treasury reserve asset, despite the new monetization authorization . The 1.25 billion dollar monetization capacity is a "rounding error" relative to Strategy's roughly 50 billion dollar Bitcoin position, but the authorization itself gives management more flexibility to defend the capital structure during periods of market stress .
Saylor added that Strategy expects to remain disciplined in its use of MSTR issuance, particularly when the stock trades at or near 1x mNAV .
What This Means for Investors
For traders on Gate watching Strategy's evolving capital structure, the new framework signals three important developments:
Reduced Near-Term Funding Pressure: The expanded liquidity buffer gives Strategy room to navigate a prolonged period of Bitcoin price weakness without being forced to sell significant BTC holdings.
Enhanced Credibility: The formalized framework and increased cash reserve should provide comfort to STRC holders that the company has the resources to meet its dividend obligations.
Flexibility Without Abandonment: The ability to monetize a small portion of the Bitcoin position provides optionality without signaling a shift away from the core Bitcoin treasury strategy.
DYOR 🔍
#StrategyBuybackSurges12%
Strategy Unleashes a 2 Billion Dollar Defense Plan
Strategy just broke its nine-day losing streak with a 12.6% surge, and the move is sending a clear signal to the market: the company is no longer just buying Bitcoin — it is actively managing its own survival.
The catalyst was a new Digital Credit Capital Framework announced on June 29. The plan authorizes up to 2 billion dollars in stock buybacks, backed by a Bitcoin monetization program that allows the company to sell up to 1.25 billion dollars in BTC to fund the repurchases . CEO Phong Le described the shift as an evolution from "one-way capital issuance to active capital management" .
The Numbers That Matter
The mechanics are straightforward. Strategy currently holds 847,363 Bitcoin, worth approximately 50.7 billion dollars at current prices . But the company's market cap has fallen below the value of its Bitcoin holdings, with the mNAV ratio dropping below 1.0 for the first time . In simple terms, the market is pricing the entire company at a discount to the Bitcoin on its balance sheet.
The framework addresses this directly. The board authorized two separate 1 billion dollar buyback programs: one for preferred securities and another for Class A common stock . Neither program obligates the company to make purchases, but the authorization itself signals that management sees value at current levels .
The company also raised the annual dividend rate on its STRC preferred stock to 12%, up from 11.5%, effective for dividend periods beginning July 1 . The goal is to bring STRC back toward its 100 dollar stated amount, after it had sunk to a record low near 74 dollars .
Why This Matters for Investors
The most significant shift is the Bitcoin monetization program. For years, Strategy operated on a strict "buy and hold" model. That has changed. The company now has formal authorization to sell Bitcoin for three specific purposes: funding securities buybacks, paying preferred dividends and interest, and building its USD reserve .
This is not a liquidation. Executive Chairman Michael Saylor reaffirmed that the company "remains committed to Bitcoin as its primary treasury reserve asset" . The 1.25 billion dollar monetization capacity is small relative to the company's 50.7 billion dollar Bitcoin position — one analyst called it a "rounding error" . But the authorization itself is a structural shift that gives management more flexibility to defend the capital structure during periods of market stress .
The company also built a 2.55 billion dollar USD reserve, enough to cover approximately 17.4 months of preferred dividend and interest obligations . A new board policy requires the reserve to maintain at least 12 months of coverage at all times . Combined with the monetization program, Strategy now has roughly 3.8 billion dollars in liquidity to meet its obligations .
Market Reaction and Analyst Views
The market responded positively. MSTR jumped 12.6% to 92.68 dollars on the announcement, while STRC climbed to approximately 81 dollars . Benchmark Equity Research reiterated its "Buy" rating and 570 dollar price target, citing the new framework as a sign that management can run the capital engine in "reverse" when markets demand it .
The Bottom Line
Strategy's 2 billion dollar buyback plan is a defensive move designed to stabilize a capital structure that came under severe pressure as Bitcoin weakened and the stock sold off. The framework gives management more tools to manage liquidity, support the preferred stock, and signal confidence to the market. Whether this is a turning point or a temporary relief rally will depend on Bitcoin's next move. But for now, the company has bought itself time and breathing room.