Strive raises $630 million with 15% dividend bet on Bitcoin gains

Strive is raising $630 million through preferred shares carrying a fixed 15% annual dividend, betting that Bitcoin’s long-term appreciation will outpace its dividend and financing costs.

The Bitcoin treasury company launched the new preferred stock, SATS, and increased the offering by 40% after strong demand, host Natalie Brunell said on her Oct. 19 program.

SATS pays dividends every business day at a fixed annual rate of 15%. The shares were offered at $90, while dividends are calculated on $100, producing an effective annual yield of nearly 17% if Strive makes all scheduled payments.

Strive plans to use the proceeds for Bitcoin purchases and other corporate purposes. It bought more than 6,000 Bitcoin over the past two weeks, lifting its holdings to 35,600 from fewer than 8,000 at the beginning of the year.

Bitcoin does not generate income, leaving Strive responsible for maintaining the cash needed for dividends. The company plans to reserve enough money to cover the first 18 months, after which it will need to generate cash, sell assets or raise additional funds. Its financial model assumes Bitcoin could appreciate 50% annually over time, Brunell said.

SATS investors own preferred shares in Strive rather than Bitcoin. They receive steady income while assuming the risk that the company may not be able to maintain its dividend payments. The central question is whether Bitcoin’s long-term gains will exceed the cost of the preferred-share financing.

Bitcoin treasury companies are also facing broader market pressure. MSCI is reviewing index eligibility under new rules that consider whether more than half of a company’s assets are connected to business operations. Strategy and Japan’s Metaplanet were among the companies flagged in its initial analysis, with the final list due Nov. 11.

JPMorgan estimates that Strategy’s removal could trigger roughly $2.8 billion in selling by funds tracking MSCI indices. Strategy said that amount is less than the stock’s normal daily trading volume, adding that “Bitcoin doesn’t need MSCI and neither does Strategy.”

Brunell said exclusion from the indices could pressure Strategy shares in the short term without changing its business or Bitcoin strategy. Strive’s preferred-share offering similarly rests on a long-term bet that Bitcoin’s appreciation will outweigh its financing costs.