Fidelity Digital Assets reported on Oct. 20 that perpetual preferred stock issuance had funded cumulative purchases of 135,979 Bitcoin through Oct. 5. Research analyst Zack Wainwright said the acquisitions represented more than 0.5% of Bitcoin’s maximum supply, adding another corporate treasury channel to spot demand.
The financing model involves companies issuing dividend-paying preferred shares and deploying the U.S. dollar proceeds to buy Bitcoin on exchanges and over-the-counter desks. Between March and May, preferred issuance financed more than 95,000 BTC and raised over $7 billion, according to Fidelity. The report cites filings from Strategy and Strive, comparing the flow to the 888,185 BTC accumulated by spot Bitcoin exchange-traded products in their first year.
Fidelity emphasized the strategy depends on Bitcoin’s long-term appreciation outpacing the cost of preferred dividends. “For issuers, the strategy only works if the appreciation of the underlying asset outpaces the cost of yield,” the report said. Preferred holders face issuer, liquidity, interest-rate and inflation risks, and rank ahead of common shareholders but below bondholders in liquidation.
