Strategy bitcoin purchases shrink as buybacks take priority ahead of earnings

<p>Saylor skips his Sunday bitcoin chart as Strategy heads into earningsStrategy chairman Michael Saylor did not share his usual Sunday bitcoin chart this week. Bitcoin watchers read that as a sign that Strategy (MSTR), the largest corporate holder of bitcoin, may have paused its buying. Saylor was active on X on Sunday: he described bitcoin as “the moat” in a reply to Jack Dorsey. But the chart that usually comes before a purchase announcement did not appear. A missing chart is a signal, not a confirmation. The company’s Monday filing will settle the question, and its third-quarter results follow on Thursday. </p><p>---</p><p>Earlier:</p><ul><li><a href="https://investinglive.com/cryptocurrency/bitcoin-buyers-are-fighting-back-but-sellers-aren-t-finished-here-are-the-two-prices-swing-traders-should-watch" rel="follow" target="_blank">Bitcoin buyers are fighting back, but sellers aren't finished. Here are the two prices swing traders should watch</a></li></ul><p>---</p><p>What is the ‘orange dot chart’?For more than a year, Saylor has posted a snapshot of Strategy’s bitcoin tracker to X almost every Sunday. The chart plots the value of the company’s holdings over time, and each orange dot marks a purchase. The graphic has historically come before a Monday 8-K filing confirming that Strategy bought bitcoin the previous week. The caption changes each week, but the message is usually the same: more coins are coming. Over the past two weeks, Saylor captioned the chart with variations on finding room for more orange, and both posts were followed by purchase disclosures. The pattern is not a fixed rule. In July, after a large bitcoin sale, Saylor posted the tracker with an unusually vague caption saying the orange dots tell only part of the story, and the post a week earlier had come before the largest sale in company history. A missing chart suggests a pause, but it does not prove one. The buying has already slowedThe size of recent purchases is the bigger story. Strategy bought 267 BTC for about $22.1 million at an average of $82,900 per coin in the week to October 18. That followed a 250 BTC purchase for about $21.5 million the week before. Earlier in the year, single weekly purchases topped 20,000 BTC. The latest purchase was funded almost entirely by selling 140,872 MSTR shares through the company’s at-the-market program. Over the same week, the company spent far more on its own securities. It used $193.1 million to buy back 1.94 million shares of its STRC preferred stock, and the board raised its digital credit securities repurchase program from $2 billion to $3 billion. STRC is one of Strategy’s preferred shares, which pay holders a regular dividend. Buying them back below their $100 face value reduces the company’s future dividend costs. Michael Saylor 'Found More Room for Orange' as Strategy Adds 267 Bitcoin - Strategy (NASDAQ:MSTR) - BenzingaStrategy has also sold bitcoin this year. It reported selling 32 BTC in early June, its first disclosed sale since a 2022 tax-loss transaction. It then sold 3,588 BTC for about $216 million to fund preferred stock distributions and top up its US dollar reserve. A further 1,638 BTC was sold between July 27 and August 2 at an average of $63,957, with the proceeds split between preferred dividends and STRC buybacks. Even so, Strategy’s holdings stand at 848,517 BTC, bought for about $64 billion at an average of $75,446 per coin, more than 4% of bitcoin’s total supply. What could change the readA pause would not be new. In September, Saylor’s chart returned after a two-week buying break, and purchases resumed. The company also has the money to buy. As of October 4, its USD Reserve stood at $4.88 billion, with $833.4 million in USD Cash. A larger purchase disclosed on Monday would undercut the slowdown story. Another quiet week on bitcoin, alongside continued buybacks, would reinforce it. bitcoinWhat to watch nextThe first test is Monday’s 8-K filing, which will show whether Strategy bought, sold or held bitcoin last week, and how much it spent on buybacks.Next come third-quarter results. Strategy reports after the US close on Thursday, October 29, and will host a live webinar at 5:00 p.m. Eastern Time. The headline profit should hold few surprises, since the fair value of the company’s bitcoin was already above its cost basis as of September 30. Management’s comments on funding, dividends and the balance between buybacks and bitcoin purchases are likely to matter more. For bitcoin traders, the practical point is that Strategy has been a steady buyer through much of this cycle. If its weekly purchases stay small, the market loses a reliable source of demand. Watch the size of the purchases, not just whether there are any.</p><p></p> This article was written by Eamonn Sheridan at investinglive.com.