Key Highlights

  • Of that, $103.5 million went toward buying back preferred stock, with the rest going to bitcoin.
  • Gold had its worst day since June, and stocks fell, with the Nasdaq Composite down 248.34 points at 26,820.38.
  • , the week also brings Solana's Alpenglow upgrade, a World Liberty Financial governance vote and Korea Blockchain Week.
  • Strategy funds its Bitcoin buying largely by tapping capital markets, which links its purchases to market conditions.

Michael Saylor's Strategy added another 1,665 bitcoin last week, funding the purchase by selling its own shares, and now holds 847,666 coins.

Another week, another purchase

Strategy (NASDAQ:MSTR), the company formerly known as MicroStrategy, has turned buying bitcoin into a weekly ritual. In a filing on Monday, September 28, the company disclosed that it bought 1,665 bitcoin for $142.7 million between September 21 and September 27, at an average price of $85,681 per coin. That lifted its total holdings to 847,666 bitcoin.

As usual, co-founder and executive chairman Michael Saylor teased the purchase before the filing. On Sunday he posted "Even more orange," a nod to the orange color associated with bitcoin that his followers have come to recognize as a signal of fresh buying.

How the purchase was funded

Strategy funds its bitcoin buying largely by tapping Capital Markets rather than relying on cash from its software business. This time, it sold 1.47 million of its own shares, raising $246.2 million, according to the filing. Of that, $103.5 million went toward buying back preferred stock, with the rest going to bitcoin.

This approach, selling stock to buy bitcoin, has become the company's signature strategy. Because the company's fortunes are tied so closely to its bitcoin holdings, the stock tends to move sharply with the cryptocurrency's price. Strategy's shares closed at $158.61 on Friday; its Monday move could not be confirmed.

Buying above today's price

The timing shows the risks of the approach. Strategy's average purchase price last week was $85,681. By Monday, bitcoin had slipped to around $83,450 near the US stock market close, after trading as low as $82,957.64 in the morning. That means the latest batch was bought above where bitcoin traded on Monday.

Strategy's model depends on the long-term belief that bitcoin will rise over time, a view Saylor has championed for years.

The macro headwinds

Monday was a tough day for risk assets. The 10-year Treasury Yield hit its highest level since 2007, the dollar strengthened, and oil rose after President Trump rejected Iran's proposal to reopen the Strait of Hormuz. Gold had its worst day since June, and stocks fell, with the Nasdaq Composite down 248.34 points at 26,820.38.

Higher interest rates can be a challenge for bitcoin, which pays no income, and for companies that rely on raising capital. The Federal Reserve raised rates at its September meeting for the first time in three years, and futures price a strong majority chance of another hike in October.

A crowded crypto week

Strategy's purchase came as other crypto names made news. Coinbase (NASDAQ:COIN) rose after expanding a Stablecoin Partnership with Citigroup (NYSE:C), while Circle slipped after announcing its chief financial officer would step down at year-end. Fintech stocks SoFi (NASDAQ:SOFI), Affirm (NASDAQ:AFRM) and Robinhood (NASDAQ:HOOD) fell as yields climbed.

, the week also brings Solana's Alpenglow upgrade, a World Liberty Financial governance vote and Korea Blockchain Week.

Strategy's next filing shows whether it keeps buying

Watch for Strategy's next filing, which could show whether it kept buying as bitcoin dipped, and how it funds any further purchases. The relationship between Strategy's share price and the value of its bitcoin will also be closely watched.

On the macro side, Friday's September jobs report, where economists expect about 98,000 new jobs, could move yields and the dollar, and with them bitcoin. A calmer Bond Market would ease pressure on the whole crypto complex.