The change showed up in Strategy’s Q1 2026 disclosures and STRC prospectus, which say dividend payments are mainly funded through MSTR share issuance, but can also be backed by Bitcoin sales depending on market conditions and the company’s overall situation, OAK Research reported this week. In plain English, Bitcoin is no longer just the asset Strategy accumulates. It is also part of the machinery that keeps the capital structure running.

The company built a reserve to make that machinery less brittle. In December 2025, Strategy set aside a $1.44 billion cash reserve funded through MSTR ATM proceeds, with the goal of eventually covering 24 months of dividend and interest obligations, according to its SEC 8-K. That reserve buys time, not magic. The obligations still exist.

A shareholder vote closing June 8, 2026 would also shift STRC dividend payments from monthly to semi-monthly while leaving the 11.50% annual rate unchanged, OAK Research reported this week. The move is administrative, but it also makes STRC look a little more like a conventional income product, which probably helps when you are trying to sell a Bitcoin-linked preferred stock to a broader audience.

STRC launched in July 2025 as a floating-rate perpetual preferred stock on Nasdaq Global Select Market, raising $2.521 billion in what was then the largest U.S. IPO of the year, OAK Research reported this week. By late April 2026, its notional value had reached $8.54 billion, with 30-day average liquidity of roughly $375 million.

The basic loop is simple enough to describe and awkward enough to admire. Strategy sells STRC through at-the-market offerings, combines those proceeds with MSTR equity issuance, buys Bitcoin, and services STRC’s 11.50% annual dividend mostly through more MSTR issuance, with Bitcoin sales now named as a fallback. That is not passive treasury management. It is a capital-markets machine with a Bitcoin engine bolted on.

The loop was on display in March. Strategy’s March 9-15 8-K showed $1.2 billion in STRC ATM proceeds and $396 million in MSTR proceeds funding a record single-week purchase of 22,337 BTC, Bitcoin Magazine reported last month. That is the kind of number that makes the model look almost self-propelling, at least when the market cooperates.

STRC has also found buyers. In Q1 2026, it traded inside the $99 to $101 target range 100% of the time, up from 22% in October 2025, while average daily liquidity rose from about $54 million in December 2025 to $365 million in April 2026, OAK Research reported this week. Between early October 2025 and early May 2026, Bitcoin fell roughly 37% while STRC stayed close to par and paid around 6.4% in cumulative dividends over the period, OAK Research said.

For U.S. investors in the 37% tax bracket, 2025 STRC distributions were treated entirely as return of capital, producing a tax-equivalent yield of roughly 18.3%, OAK Research reported this week. That helps explain the demand. Yield with a Bitcoin tailwind is a hard thing to ignore, especially when the price stays near $100 and the coupon keeps coming.

Strategy also says it holds about $7.30 in Bitcoin for every $1 of STRC notional issued, though that Bitcoin is not legal collateral for STRC, and STRC has no principal repayment obligation, OAK Research reported this week. That makes STRC a peculiar hybrid: part income product, part Bitcoin proxy, part confidence trick if the market stops believing the premium will hold. Not quite a bank note. Not quite a crypto asset. Definitely not boring.

The real test is whether the machine can keep scaling. On March 23, 2026, Strategy announced its “42/42” plan, a $42 billion at-the-market authorization split evenly between MSTR and STRC, with the explicit goal of reaching 1 million BTC by the end of 2026, OAK Research reported this week. At that point, Strategy held 762,099 BTC, so it needed roughly 240,000 more coins to hit the target.

At its recent average pace of around 21,000 BTC per month, that target pushes into March 2027, Bitcoin Magazine reported last month. The math is not impossible. It is just relentless.

If Strategy fully executes the plan and lifts STRC notional from $8.5 billion to about $30 billion, annual dividends would rise above $3.4 billion at the current 11.50% rate, OAK Research reported this week. That is a large bill by any standard, and it still depends on access to equity markets on favorable terms.

That is where the mNAV framework matters. Galaxy’s model, as described by CoinDesk in late March, says the treasury-company trade works only while equity trades at a premium to the value of the underlying Bitcoin. Once that premium compresses, new share issuance stops being accretive and starts becoming dilutive. Strategy’s current BTC breakeven annual return rate is about 2.3%, OAK Research reported this week, which is a low bar, but still a bar.

Strategy’s access to capital is still real. As of April 30, STRC ranked as the second-largest holding in BlackRock’s iShares Preferred and Income Securities ETF and the second-largest position in VanEck’s Preferred Securities ex Financials ETF, OAK Research reported this week. But the 42/42 plan depends on keeping that demand intact at a scale Strategy has not yet tested.

Strategy now controls roughly 76% of all Bitcoin held by corporate treasury companies, CoinDesk reported in late March. In the same month, Strategy bought about 45,000 BTC while all other treasury companies combined bought roughly 1,000. That was a sharp fall from a combined peak of 69,000 BTC in August 2025, according to CryptoQuant data cited by CoinDesk.

The retreat makes sense once the price chart catches up. Bitcoin fell from above $110,000 in mid-2025 to under $70,000 by March 2026, leaving companies that bought near the top, with average cost bases above $107,000, deeply underwater, CoinDesk reported based on Galaxy analysis. MARA Holdings also sold 15,133 BTC, nearly 28% of its holdings, to repurchase convertible notes, Bitcoin Magazine reported last month.

Strategy’s lower average cost basis of roughly $75,537 per BTC gives it more room than most of its peers, OAK Research reported this week. Even so, the broader corporate-buying pool has thinned out enough to leave Strategy standing alone in a trade that once looked like a club.

Strategy has solved for accumulation, at least for now. The harder question is what happens if the premium narrows, the dividend burden keeps rising, and the company has to choose between the two parts of its identity: the one that buys Bitcoin, and the one that may sell it.