Bitcoin journalist Natalie Brunell said Fidelity research linked preferred-share financing to purchases totaling nearly 136,000 Bitcoin (BTC), identifying a demand channel that reached more than 0.5% of the asset’s maximum supply.
In her Oct. 26 broadcast, Brunell said Strategy and other companies used funds raised through preferred shares to buy almost 136,000 BTC over a little more than a year. Firms raised $7 billion through these offerings between March and May alone, she said. The figure refers to the amount of BTC acquired, not a count of separate purchase transactions.
Brunell compared the buying with about 888,000 BTC purchased by exchange-traded funds during their first year, putting preferred-share-funded acquisitions at roughly 15% of the ETF total. The two comparisons use different baselines: one measures purchases against Bitcoin’s maximum supply, while the other compares them with ETF buying in the funds’ first year.
The financing’s terms distribute income and costs between investors and issuing companies. Brunell said annual dividend rates on the preferred products ranged from 8% to 15%, with fixed or adjustable payments. Issuers gain capital for BTC purchases but take on dividend costs, while investors receive income from the shares. The industry calls the arrangement “digital credit.”
Brunell said Fidelity assessed the risks without endorsing the products. The dividend obligation creates a hurdle: BTC gains must be large enough to offset what issuers owe on the shares, she said.
Brunell also cited JPMorgan’s 10% base-case estimate for Bitcoin’s average annual return over the next decade. She said that exceeded the bank’s projections for private equity and the S&P 500 and was close to twice its gold estimate. Brunell said JPMorgan excluded Bitcoin from its model portfolios because the relevant data was not yet sufficiently mature.
Brunell said Bitcoin’s latest weekly close was around $80,000, its weakest since September. EconoTimes previously reported Bitcoin’s $80,500 close near the bottom of a nine-day trading range.
