Wall Street-sized money eyeing a 21 million–cap asset while one company keeps vacuuming up supply — that’s the setup traders cannot ignore. Strategy (the company formerly known as MicroStrategy) now holds an estimated 640,031 BTC, and its steady, debt-fueled purchases are colliding with a market where illiquid supply dominates. Whether you trade spot, futures, or equities, understanding this playbook can help you anticipate liquidity crunches, volatility bursts, and narrative-driven momentum.

What’s happening

Strategy has accumulated about 3% of all Bitcoin, worth over $73B, at an average cost near $73,983 per BTC. The firm continually converts capital raises into BTC, adding even during rallies — most recently ~196 BTC in September 2025 at ~$113,048. Saylor’s thesis: Bitcoin is a non-dilutable reserve and a hedge against fiat debasement poised to benefit if institutions allocate even a modest share of their assets.

Why this matters to traders

The core dynamic is a growing bid chasing a shrinking float. Estimates suggest 72%+ of circulating BTC is illiquid, with millions presumed lost and long-term holders reluctant to sell. Inflows from pensions, insurers, and asset managers — even at 10% of their assets — could mechanically push price higher due to constrained supply. This backdrop increases odds of sharp upside repricings, violent squeezes, and basis dislocations, especially around funding-heavy headlines and major macro catalysts.

How Strategy keeps buying BTC

Strategy’s purchases are primarily financed through:

• Convertible senior notes: often low/zero-coupon with conversion premiums, locking in capital now, deferring dilution. A mid-2024 raise (~$800M net) funded ~11,931 BTC at ~$65,883, followed by another ~$(~600M) deal.
• Preferred stock: “Stretch” (STRC) with variable dividends (around 9%–11.75%) marketed explicitly to fund BTC buys.
• At-the-market equity: Opportunistic, adding to the BTC treasury without selling coins.

For markets, this creates a recurring, semi-predictable bid for BTC — and equity issuance that can influence Strategy’s stock dynamics.

Key risks to price and positioning

Regulatory/accounting shifts could alter corporate incentives to hold BTC. Strategy’s approach resembles a leveraged BTC vehicle; equity holders face dilution. The million-dollar thesis depends on actual institutional allocation, not just narratives. Volatility remains a feature, not a bug.

Actionable trading ideas

• Track the bid: Monitor Strategy announcements, offering docs, and purchases to anticipate short-term demand shocks.
• Watch illiquidity: Follow on-chain metrics for long-term holder supply and coin dormancy; tightening floats can precede breakouts.
• Trade the basis: Funding and futures basis often expand around headline buys; consider spread trades with strict risk controls.
• Event-map: Align positioning with potential capital raise windows, ETF inflow surges, and macro prints that influence institutional risk appetite.
• Risk discipline: Use scenario planning (e.g., rapid moves toward supply-driven targets), define invalidation levels, and size positions for volatility.

What to watch next

• New raises: Convertible, preferred, or ATM activity signaling forthcoming BTC purchases.
• Regulatory clarity: Accounting and tax treatment that may accelerate or deter corporate adoption.
• Institutional flows: Evidence of large managers shifting AUM into BTC, ETF net creations, and custody growth.

In a market where deliberate, repeatable demand meets structurally limited supply, traders who map the financing cycle, monitor illiquidity, and prepare for repricing events will have the edge. If you don't want to miss any crypto news, follow my account on X.