714,644 Bitcoins, MicroStrategy's unstoppable BTC alchemy

The world’s largest corporate Bitcoin holder, MicroStrategy, owns 710,000 BTC, with an unrealized paper loss of $6.4 billion. Despite this, it continues to buy BTC using five perpetual preferred stock tranches. This article takes an in-depth look at Michael Saylor’s $84 billion alchemy.

(Background recap: MicroStrategy CEO: Bitcoin only threatens Strategy’s debt repayment ability if it drops to $8,000 and remains stagnant for years.)

(Additional context: MicroStrategy’s BTC unrealized loss surpasses $10 billion! The company’s financial report shows the worst stock price plunge in history—17% overnight.)

Table of Contents

• The Five Perpetual Preferred Stocks
• The Flywheel Effect of Strategy
• The Boundaries of Alchemy
• The Unstoppable Machine

714,644 BTC

This is MicroStrategy’s (Strategy) holdings as of February 12, 2026. At current prices, these Bitcoins are worth about $48 billion, accounting for over 3.4% of the total circulating supply worldwide. That means for every 30 Bitcoins in circulation globally, one belongs to this company.

In a bearish crypto market, the company shows an unrealized loss of approximately $6.7 billion. However, its founder Michael Saylor remains undeterred. The company’s “42/42 Plan” aims to raise $84 billion by 2027: half equity, half debt, all to buy Bitcoin. As of January 2026, $41 billion of this quota remains unused.

The Five Perpetual Preferred Stocks

Where does Strategy get the money to buy Bitcoin?

The answer is a carefully designed set of financial instruments. Starting January 2025, Strategy has issued five perpetual preferred stocks at a dizzying pace, each with a deliberately chosen name:

STRK (Strike) — 8% dividend, convertible into MSTR common stock. Every 10 STRK shares can be exchanged for 1 MSTR share. In other words, if Bitcoin and MSTR stock prices rise, you can convert the preferred stock into common stock to earn more.

STRF (Strife) — 10% fixed dividend, non-convertible, cumulative. If a dividend payment is missed once, the rate automatically increases by 1 percentage point annually, up to 18%. This is a debt instrument with penalty clauses.

STRD (Stride) — 10% dividend, non-convertible, non-cumulative. Missed payments are simply missed; no catch-up.

STRC (Stretch) — Floating rate, designed to compete with money market funds. ATM program limit of $4.2 billion.

STRE (Stream) — The latest issue launched in November 2025.

These five products cater to five different risk preferences and investor groups. Essentially, Saylor is breaking down the risk of holding Bitcoin into five financial products, selling to five different types of investors.

Some seek conversion rights (betting on Bitcoin’s rise), some want fixed income (just a steady 10%), others prefer floating rates (hedging interest rate risk)… but ultimately, their money flows into the same place: Bitcoin.

The total ATM (market value sale) limits for these preferred stocks are: STRK $21 billion, STRC $4.2 billion, STRF $2.1 billion, STRD $4.2 billion. Totaling over $30 billion.

The Flywheel Effect of Strategy

The logic behind MicroStrategy issuing preferred stocks is this: Strategy issues new shares (common or preferred) ⭢ funds are used to buy Bitcoin ⭢ Bitcoin enters the company’s balance sheet ⭢ boosts the company’s asset size and market value ⭢ higher market value supports larger new share issuance capacity ⭢ more funds are raised ⭢ more Bitcoin is bought (cycle repeats).

This is the so-called flywheel effect: as long as Bitcoin’s price rises or at least doesn’t crash, the flywheel keeps spinning.

In 2025, this flywheel spun rapidly. Strategy’s holdings grew from about 440,000 BTC at the start of the year to over 670,000 BTC by year-end, acquiring more than 230,000 BTC in one year, costing hundreds of millions of dollars. The company’s “42/42 Plan,” originally called the “21/21 Plan,” doubled its target from $42 billion to $84 billion after Bitcoin’s price and institutional interest exceeded expectations.

Saylor calls the launch of STRC preferred stock Strategy’s “iPhone moment”: a breakthrough product redefining the company’s financial structure.

But the flywheel has a fatal weakness: it cannot reverse.

If Bitcoin’s price drops sharply, the company’s market cap shrinks, its capacity to issue new shares is limited, and funds to buy more Bitcoin dry up. The flywheel slows down. Meanwhile, the dividend obligations of existing perpetual preferred stocks remain. STRK pays 8% annually, STRF 10%. You can skip payments, but the debt accrues at increasing interest rates, up to 18%.

The Boundaries of Alchemy

Gold bull Peter Schiff once asked Saylor on social media: “Strategy is losing money. How do you pay the dividends on preferred stocks?”

Critics call it a “Ponzi scheme,” supporters see it as “financial innovation.” Strictly speaking, neither side is entirely correct. Strategy’s Bitcoin holdings are real assets; as long as Bitcoin’s price doesn’t go to zero, the company has tangible backing. But the problem is Bitcoin’s high volatility, while the company’s obligations—dividends and interest—are fixed.

Although Strategy claims its current cash flow can cover interest payments for at least two and a half years, sustained Bitcoin downturns could hamper its fundraising ability.

Saylor’s bet is clear: he bets on Bitcoin’s long-term appreciation. Not just a little, but enough to turn all paper losses into a joke. In 2020, he was mocked for buying at $11,000. Bitcoin later soared above $100,000. Now, with an average cost of $76,000, he continues buying. Looking back in five years, it might be another “why didn’t I join earlier” story.

His ultimate plan: when Strategy’s holdings and market cap grow large enough, the market will be forced to include MSTR in major indices. Passive fund inflows will further push up the stock price, triggering a new cycle of the flywheel. By December 2025, Strategy was already included in the Nasdaq-100; the next target is the S&P 500.

The Unstoppable Machine

The story of Strategy ultimately is a story of irreversibility.

This machine has no brakes. Saylor believes that in a world of persistent fiat currency devaluation, stopping would be the greatest risk. So he transformed the company into a one-way Bitcoin accumulation device: buy-only, no sell; in-only, no out.

Today, he sits atop 714,644 BTC, with an unrealized loss of $6.4 billion, paying at least $700 million annually in dividends, with hundreds of millions more in reserve to continue buying. This machine will eventually prove whether Saylor is a prophet or whether he’s replaying the March 20, 2000, crash. No one knows yet.

But one thing is certain: in financial history, no one has used perpetual preferred stocks, cumulative dividends, and an $84 billion capital plan to bet on an asset with only 17 years of history. This is the capitalization of faith.