Author: Micah Zimmerman
Compiled by: AididiaoJP, Foresight News
Bitcoin-backed preferred stock—led by companies like Strategy, with new entrants like Strive following closely—has grown to a market size of approximately $130 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 stock issued by publicly listed companies and backed by their own bitcoin holdings. The total market value of such securities is currently about $130 billion, accounting for nearly 1% of the global $1.3 trillion preferred stock market. The report authors expect this share to rise to 3% to 5% by 2030, with the long-term potential to reach 10%, or $1.3 trillion.
This financial instrument is at the heart of the financing dilemma for companies holding bitcoin as a treasury asset. Firms like Strategy, led by Michael Saylor, seek long-term capital to acquire more bitcoin while avoiding dilution for common shareholders and sidestepping debt with fixed repayment schedules. However, bitcoin's extreme price volatility makes this balance difficult.
Bitcoin approached a high of $124,720 in October 2025 before falling below $60,000 by mid-June 2026, a maximum drawdown of roughly 47% over eight months.
Preferred stock offers a way around the problem. When a company issues preferred stock, the number of common shares does not increase, allowing existing shareholders to avoid equity dilution. These shares are classified as equity, not debt, so they have no maturity date and no mandatory repayment. In exchange, holders receive dividends that have priority over common stock dividends.
For income-oriented investors who might otherwise be shut out from bitcoin's price appreciation potential, this structure transforms bitcoin's volatility into a stable income product.
Preferred Stock Driving Bitcoin Expansion
These yields far exceed those available in the fixed-income market. The effective yields of the top five US Bitcoin-backed preferred securities range from 10.8% to 15.2%, while high-yield savings accounts offer only 3% to 4%.
Strategy's products dominate the market: the combined market capitalization of STRF, STRC, STRK, and STRD is close to $12.5 billion. Strive, an asset management firm turned bitcoin treasury company, has issued the fifth security, SATA, with a market cap of about $330 million.
A core argument of the report is that demand vastly outstrips supply. Fixed-income institutions like mutual funds, banks, pensions, and insurance companies hold $10.9 trillion in US Treasury assets. If they were to shift just 10 to 20 basis points of this capital into bitcoin preferred stock, it would generate $10.9 billion to $21.8 billion in demand—enough alone to support the report's near-term market forecast.
However, supply 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, worth approximately $83 billion. Strategy alone holds about 845,000 of these, representing 67%.
Collateral coverage is a key safety feature highlighted in the report. Bitcoin-backed preferred stock maintains coverage ratios of 3.8x to 4.5x, meaning for every $1 of preferred equity, there is $3.8 to $4.5 worth of bitcoin backing it.
In contrast, the median loan-to-value ratio for residential mortgages at large banks in Q3 2025 was $0.76 of loan per $1 of property value. "The safety of these instruments is significantly higher than 95% of the bonds on 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 the requirements: a clean balance sheet (no senior secured debt), scale to support an issuance of at least $100 million, and an experienced team regarding tax treatment, covenant design, and dividend policy.
He noted that bitcoin already encumbered by other liens would take priority over preferred equity claims, preventing most deals. Strive itself, in January, used a $225 million SATA issuance to pay off debt inherited from its acquisition of Semler Scientific, a move that kept all its bitcoin unencumbered.
The risks are more structural than hidden. Strategy's common stock, MSTR, acts as a volatility amplifier, having fallen more than bitcoin over the past year. "When the bitcoin price declines, Strategy's stock price declines more," said Tony Lau, Investment Partner at Primitive Ventures, describing a potential cascading share price effect.
Three of Strategy's four preferred stocks trade below their $100 face value. The ability to pay dividends depends on the company's continued ability to raise capital when bitcoin prices rise, though both Strategy and Strive have disclosed sufficient cash reserves to cover at least 12 months of payments.
Strategy 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 stock as a tool in its "0 to 1 moment"—market demand exceeds what issuers can supply, a gap that favors the companies willing to build these products.
