MicroStrategy: 2.05% BTC Growth Covers Preferred Dividends

MicroStrategy said its bitcoin holdings need about 2.05% annual price growth to indefinitely cover cash dividends on its preferred stock without issuing new common shares.

Chairman Michael Saylor posted the figure on Sunday and identified it as the company’s “BTC Breakeven Annual Rate of Return,” writing: “Our BTC Breakeven ARR is ~2.05%.” The metric measures the average yearly bitcoin price increase that would generate sufficient value from MicroStrategy’s bitcoin reserve to fund preferred dividends.

MicroStrategy’s public dashboard lists the company’s holdings at 766,970 BTC, acquired at an average price near $75,648 per coin, with a total valuation the company reports at roughly $58 billion. The dashboard also shows the current reserve would cover about 48.7 years of preferred dividends at present payout levels.

The preferred instrument is the Variable Rate Series A Perpetual Preferred Stock, ticker STRC. STRC carries an annual yield near 11.5%, trades close to its $100 par value and pays monthly cash dividends. MicroStrategy has used proceeds from STRC issuances to buy additional bitcoin.

Saylor posted the breakeven calculation alongside a cumulative purchase chart and a “Think ₿igger” message. In prior instances, similar Sunday posts from the chairman were followed by Monday 8-K filings that disclosed large bitcoin acquisitions.

The breakeven number applies specifically to servicing preferred-stock dividend obligations given the current reserve size. It does not account for other corporate expenses or the short-term price swings that can affect cash and liquidity. STRC is a perpetual, variable-rate instrument, and meeting monthly dividend payments depends on the company’s liquidity management and market conditions.