TL;DR - Strategy just boosted its USD reserve by $525 million to $3.75 billion, enough to cover 2.1 years of preferred stock dividends and debt interest without selling a single bitcoin. BTC holdings remain at 843,775 BTC. The company has gone from "buy bitcoin at all costs" to running one of the most aggressively backstopped capital structures in public markets.
Quick Answer: Strategy's USD reserve now stands at $3.75 billion as of July 27, 2026. With approximately $1.76 billion in annual preferred stock dividend payments and debt interest, the reserve covers roughly 25.5 months - or 2.1 years - of obligations. The company holds 843,775 BTC valued at approximately $53.8 billion and has not sold any bitcoin to fund the reserve buildup.
How Did Strategy Build a $3.75 Billion Cash Reserve?
Four weeks ago, Strategy announced its Digital Credit Capital Framework with a $2.55 billion USD reserve. Since then, the cash pile has grown by $1.2 billion through ATM (at-the-market) sales of MSTR common stock. The company has been selling shares into the open market and parking the proceeds in a reserve account that can only be used for two things: preferred stock dividends and debt interest.
The latest $525 million increase came from the sale of more than 5.4 million MSTR shares, generating $544.5 million in net proceeds. A small portion - $25 million - went toward repurchasing 288,930 shares of STRC preferred stock, which reduces future dividend obligations.
Here's how the reserve has grown:
- December 2025: $1.44 billion (21 months coverage)
- June 28, 2026: $2.55 billion (17.4 months coverage)
- July 13, 2026: $3.0 billion (20.4 months coverage)
- July 27, 2026: $3.75 billion (25.5 months / 2.1 years coverage)
The board's minimum policy requires 12 months of coverage. Strategy is now running at more than double that threshold.
What Are Strategy's Annual Dividend Obligations?
Strategy pays dividends on four preferred stock series, each with different rates and seniority. The combined annual bill, including debt interest, runs approximately $1.76 billion.
- STRF (Strife): 10% fixed, cumulative, quarterly. Most senior preferred - if Strategy misses a payment, it compounds at up to 18%
- STRC (Stretch): 12% variable rate (raised from ~11.5% on July 1, 2026), semi-monthly payments. The rate adjusts monthly to keep the share price near its $100 par value
- STRK (Strike): 8% fixed, convertible into MSTR common stock at a predetermined ratio
- STRD (Stride): 10% fixed, non-cumulative, quarterly. Most junior preferred
The STRC rate hike to 12% is worth noting. Strategy deliberately increased it to support the $100 par value target, which means the company is voluntarily taking on higher costs to maintain credit quality. That's a signal about priorities. For context on how STRC's risk-adjusted returns compare to other yield instruments, see our STRC Sharpe ratio analysis.
Why Is Strategy Hoarding Cash Instead of Buying Bitcoin?
This is the question everyone's asking. Strategy broke its 13-week buying streak and hasn't bought bitcoin since reaching 843,775 BTC. Instead, it's been raising capital through MSTR share sales and putting all of it into the USD reserve.
The answer is structural. Strategy's preferred stock instruments have grown into a massive capital structure - roughly $1.76 billion per year in fixed obligations. In a crypto bear market, the company's ability to sell MSTR shares (which track bitcoin) would evaporate at exactly the moment it needs cash most. The USD reserve is the insurance policy against that scenario.
There's also a $1.25 billion BTC monetization authorization sitting in reserve. Combined with the $3.75 billion cash pile, Strategy has approximately $5.0 billion in total liquidity coverage - about 2.8 years of runway before it would need to raise additional capital or sell bitcoin beyond the authorized amount.
For context, the 2022 crypto winter lasted roughly 12 months from peak drawdown to recovery. Strategy's current coverage would survive two consecutive bear markets of similar duration.
What Does This Mean for Strategy's Bitcoin Holdings?
The 843,775 BTC position remains untouched. At current prices near $63,800, that's approximately $53.8 billion in bitcoin. Strategy acquired this position at an average cost of roughly $75,476 per BTC - meaning the holdings are currently underwater by about $10 billion on a cost basis.
That underwater position actually strengthens the case for the USD reserve strategy. Selling BTC at a loss to fund dividends would crystallize losses and destroy shareholder value. Building a cash buffer through equity sales (while MSTR trades at a premium to NAV) lets Strategy wait for bitcoin to recover above its cost basis.
Strategy did sell 3,588 BTC ($216 million) earlier in July under its BTC monetization program - a small slice used for what the company called "Digital Energy" purposes. But the core treasury position has been steady. For more on what triggered the pause in bitcoin buying, see our earlier coverage.
The company also holds about 4% of all bitcoin in circulation. Any meaningful selling would move the market against it.
How Does Strategy Compare to Other Bitcoin Treasury Companies?
No other public company holding bitcoin has anything close to this capital structure complexity. For a full breakdown of the competitive landscape, see our bitcoin treasury stocks comparison. Most corporate bitcoin holders - Metaplanet, Semler Scientific, KULR Technology - simply buy and hold. They don't have five classes of preferred stock generating $1.76 billion in annual obligations.
That complexity is both Strategy's advantage and its risk. The preferred instruments let Saylor raise enormous amounts of capital without selling bitcoin. But they create a fixed cost structure that requires active treasury management - exactly what the Digital Credit Capital Framework is designed to formalize.
The $1 billion Digital Credit repurchase program adds another dimension. If STRC trades below $100 par, Strategy can buy it back at a discount, reducing future dividend obligations. It's the same logic as a company buying back its own bonds at 90 cents on the dollar.
NOT INVESTMENT ADVICE. This article discusses leveraged instruments and preferred securities. Nothing in this piece constitutes a recommendation to buy or sell any security. Do your own research.
Sean Ristau | @SeanRistau | 21Rates / The Daily Stack