Strategy Bitcoin Purchase: 811 BTC, 3x More on STRC

Strategy bought 811 bitcoin for about $65.5 million last week, but it spent more than three times that on buying back its own STRC preferred stock. The numbers come from its filing on Monday, November 2, reported by Cointelegraph. So the Strategy bitcoin purchase is real, and it is small next to the buyback. Here is the detail, and what it means for miners.

The Strategy bitcoin purchase in numbers

Strategy bought 811 BTC between October 26 and November 1, at an average of $80,846, per TFTC. TFTC puts total holdings at 849,327 BTC, at an average cost of $75,451. One caution: the 848,517 BTC reported on October 25, plus 811, gives 849,328, so that total is off by one. Check the filing for the exact figure.

Strive, a smaller bitcoin treasury company, added 124 BTC between October 24 and October 30 at about $80,526 each. TFTC lists its holdings at 43,124 BTC.

Where the money went

Strategy sold about 1.18 million MSTR shares for net proceeds of $164 million. Of that, $65.5 million bought bitcoin and $98.5 million went to its dollar cash balance. Separately, it spent $208.2 million repurchasing STRC preferred shares. Cointelegraph does not say which pot paid for the buyback. Cash stood at $132.7 million, next to a separate dollar reserve of $4.79 billion.

The pattern is not new. From October 1 to 25, Strategy spent about $664 million on STRC buybacks and about $72 million on bitcoin. STRC traded at $99.22 before the open on Monday, about 0.8% under its $100 target, and Strategy’s stated policy is not to issue new STRC below $100. In short, this Strategy bitcoin purchase came second to defending the STRC price.

What 811 bitcoin means next to mining supply

New supply is the miner side of this trade. At the current reward, the network issues about 453 BTC a day, or roughly 3,170 BTC a week. So 811 BTC is about 26% of one week of new coins. That is real demand, yet it is not a flood.

The risk is the other direction. If STRC trades below $100 for long, buybacks may keep winning over bitcoin purchases. We would call that a headwind for price, not a disaster.

What it means for miners

Bitcoin is near $76,860 and the network runs about 1,040 EH/s. Miners care about price and hashprice, and a buyer of this size supports the first. Still, it does not change the second. Here is the live math.

Miner math: what hashprice pays today

Here is the live maths on November 2. Bitcoin is $76,860 and the network is 1040 EH/s, so hashprice is about $33.48 per petahash per day. That is what one PH/s of hashing earns before power.

Numbers are profit per day after electricity, at the three power prices shown. Break-even is the most you can pay per kilowatt-hour before the machine loses money. Specs are the manufacturer ratings; network data comes from mempool.space. Try your own power price in our free bitcoin mining profit calculator. See what these machines really sold for in our used ASIC miner price index. Want to run the same numbers on a machine you can buy today? See our used ASIC miners, or buy several at once through bulk lots.

If steady Strategy buying helps lift bitcoin 5%: the break-even power price on an S19k Pro rises from 6.1 to 6.4 cents per kilowatt-hour. At 8 cents, daily profit goes from -$1.23 to -$1.04.

If buybacks keep crowding out bitcoin purchases and the price falls 10%: the break-even power price on an S19k Pro falls from 6.1 to 5.5 cents per kilowatt-hour. At 8 cents, daily profit goes from -$1.23 to -$1.61.

For the maths behind break-evens, see our mining economics guides. You can also browse every miner in stock, or check where bitcoin may go next.

-Nick
ING Mining

This is general information, not financial advice. Crypto is volatile, and exchanges can fail. Please do your own research.