Strategy: Bitcoin growth above 3.3% finances STRC dividends forever

Michael Saylor, founder of Strategy (formerly MicroStrategy), explains an important but often misunderstood concept regarding the MSTR stock. According to him, if Bitcoin rises by more than 3.3% on an annual basis, the company can finance the STRC dividends indefinitely through the capital gains on its Bitcoin holdings. An insight he himself calls one of the most misunderstood metrics.

Bitcoin is available at OKX and Bybit.

What is the BTC Breakeven ARR?

The BTC Breakeven ARR (Annualised Rate of Return) represents the minimum annual return that Bitcoin must achieve so that Strategy can continue to meet its dividend obligations without adjusting the capital structure. That threshold level is 3.3%. If Bitcoin rises faster than that percentage on an annual basis, the realised capital gains on the Bitcoin reserves can be used to cover the STRC dividends, theoretically indefinitely.

Strategy also shares a chart that further clarifies the concept. With an annual Bitcoin increase of 0%, the company has enough buffer to pay dividends for another 31 years. Once the increase exceeds 3.3%, that coverage becomes infinite. With the current Bitcoin price around $62K and a slightly negative 24-hour movement of 1.9%, the question is how quickly that threshold level will be reached.

Why this matters for Strategy investors

For investors in MSTR or STRC, this is a material fact. Strategy has already sold large amounts of Bitcoin in the past to meet financial obligations, and the concept of the Breakeven ARR provides a framework to understand when that is or is not necessary. As long as Bitcoin performs above the 3.3% annual growth rate, selling is essentially unnecessary to be able to pay dividends.

Saylor thereby implicitly states that the company’s long-term strategy stands or falls with the performance of Bitcoin itself. Given the historical growth of the coin, he clearly sees this as an achievable threshold. Whether investors share that confidence remains to be seen. Analyst Michaël van de Poppe, incidentally, sees a Bitcoin price towards $68.000 as a realistic scenario in the short term.