Bitwise CIO: Strategy of Continued Buying is Key Driver Behind Bitcoin's Recent Rally

BlockBeats News, April 29th - Bitwise Chief Investment Officer Matt Hougan stated that the Bitcoin Treasury Company Strategy and its perpetual preferred stock STRC have been the "single biggest factor" in Bitcoin's recent rebound. Bitcoin has risen 20% from its February low. Hougan noted that over the past eight weeks, Strategy has added $7.2 billion worth of Bitcoin to its holdings. He said, "Yes, there have been multiple driving factors behind the recent rebound, including $3.8 billion in strong ETF inflows since March 1st and hodlers buying back in. But Strategy has been the single biggest factor all along."

Strategy is the largest publicly traded corporate holder of Bitcoin. The company purchased 3,273 BTC for $255 million between April 20th and April 26th, bringing its total holdings to 818,334 BTC. Their latest buying spree has now pushed their holdings above those of global asset management giant BlackRock, which represents around 812,300 BTC held on behalf of its clients. Hougan speculated that Strategy's buying will "continue for quite some time," driven by the issuance of STRC, the company's perpetual preferred stock, which pays a fixed dividend to investors as long as the company remains operational. He stated, "The capital raised through issuing STRC has mostly been used to buy BTC on the open market. With junk bond yields below 7% and investors pulling out of private credit, the 11.5% yield on STRC is particularly attractive. I'd guess that Strategy will raise tens of billions more through STRC."

Hougan mentioned that at current prices, Strategy could "hypothetically pay the current dividend for 42 years"; if Bitcoin were to rise by 20% annually, they could "pay dividends forever." Alex Thorn, Head of Research at crypto financial services firm Galaxy Digital, stated that if Strategy continues at its current pace, its holdings could surpass Satoshi Nakamoto in the next two years. Strategy would need to acquire an additional 277,666 BTC to match Satoshi Nakamoto's holdings.