By: Micah Zimmerman
Compiled by: AididiaoJP, Foresight News
Bitcoin-backed preferred shares—led by MicroStrategy, with emerging players like Strive following closely—have grown to a market size of approximately $13 billion in less than two years. These products have attracted significant capital by offering high yields.
A research report released in June 2026 by BitcoinTreasuries.net in collaboration with DeFi protocol Apyx suggests this expansion is just beginning. The report tracks preferred shares issued by publicly traded companies, backed by their own Bitcoin holdings. The total market capitalization of such securities is currently around $13 billion, accounting for nearly 1% of the global $1.3 trillion preferred share market. The report authors anticipate this share will rise to 3% to 5% by 2030, potentially reaching 10% in the long term, equating to $1.3 trillion.
This financial instrument lies at the heart of the funding challenge for companies holding Bitcoin as a treasury asset. Companies like MicroStrategy, led by Michael Saylor, seek long-term capital to purchase more Bitcoin while avoiding dilution of common shareholder equity and wanting to steer clear of debt with fixed repayment schedules. However, the severe volatility of Bitcoin's price makes this balance difficult.
Bitcoin approached a high near $124,720 in October 2025, before dropping below $60,000 in mid-June 2026, representing a maximum drawdown of approximately 47% over eight months.
Preferred shares offer a path around this conundrum. When a company issues preferred shares, the number of common shares does not increase, allowing existing shareholders to avoid equity dilution. These shares are classified as equity, not debt, thus having no maturity date and no mandatory repayment. In exchange, holders receive dividends prioritized over common shares.
For income-oriented investors locked out by Bitcoin's price appreciation potential, this structure transforms Bitcoin's volatility into a stable yield product.
Preferred Shares Fuel Bitcoin Expansion
These yields far exceed levels in the fixed-income market. The effective yields of the top five U.S. Bitcoin-backed preferred securities range from 10.8% to 15.2%, compared to just 3% to 4% for high-yield savings accounts.
MicroStrategy's products dominate most of the market: STRZ, STRC, STRK, and STRD have a combined market cap nearing $12.5 billion. Asset manager-turned-Bitcoin treasury company Strive has issued the fifth security, SATA, with a market cap of approximately $330 million.
The report's core argument is that demand far outstrips supply. Fixed-income institutions like mutual funds, banks, pension funds, and insurance companies hold $10.9 trillion in U.S. Treasury securities. If they shifted just 10 to 20 basis points of that into Bitcoin preferred shares, it would generate $10.9 billion to $21.8 billion in demand—enough alone to support the report's near-term market predictions.
Supply, however, is constrained by the amount of Bitcoin available as collateral. Of the 20 million Bitcoin in circulation, holdings by exchanges, spot ETFs, and mining companies are excluded as they constitute client assets or operational reserves.
What remains is the 1.26 million Bitcoin held in corporate treasuries, valued at roughly $83 billion. MicroStrategy alone holds about 845,000 of these, accounting for 67%.
Collateral coverage is a key safety feature highlighted in the report. Bitcoin-backed preferred shares maintain coverage ratios of 3.8x to 4.5x, meaning $3.8 to $4.5 worth of Bitcoin backs every $1 of preferred equity.
In contrast, the median for large bank residential mortgages in Q3 2025 was $0.76 lent per $1 of property value. "The safety of these instruments is significantly higher than 95% of bonds in the market," said Jeff Walton, Chief Risk Officer at Strive, in the report, "because they are backed by real capital, not future cash flows."
Not every company qualifies to issue such securities. Walton listed requirements: a clean balance sheet (no senior secured debt), scale to support at least a $100 million issuance, and a team experienced in tax treatment, covenant design, and dividend policy.
He noted that Bitcoin already pledged as collateral would rank senior to preferred equity, which rules out most deals. Strive itself paid off debt inherited from its acquisition of Semler Scientific through a $225 million SATA issuance in January, an action that kept all its Bitcoin unencumbered.
The risks are more structural than hidden. MicroStrategy's common stock, MSTR, acts as a volatility amplifier, having fallen more than Bitcoin over the past year. "When Bitcoin's price drops, MicroStrategy's stock price falls even harder," said Tony Lau, Investment Partner at Primitive Ventures, describing a potential chain reaction in stock prices.
Three of MicroStrategy's four preferred shares trade below their $100 face value. The ability to pay dividends depends on the company's continued capacity to raise capital during Bitcoin price increases, though both MicroStrategy and Strive have disclosed cash reserves sufficient to cover at least 12 months of payments.
MicroStrategy CEO Phong Le told investors in February that the company's balance sheet would remain robust unless Bitcoin fell to $8,000 and stayed there for five or six years.
For now, the report describes preferred shares as a tool in its "zero to one moment"—market demand exceeds what issuers can provide, a gap that favors those companies willing to build these products.
