FIDELITY CALLS BITCOIN PREFERREDS THE NEWEST DEMAND CATALYST — SINCE SEPTEMBER 14, STRATEGY HAS BOUGHT BACK $865.3 MILLION OF STRC AND SOLD NONE — IT HOLDS 12% UNTIL STRC TRADES NEAR $100

Fidelity Digital Assets published “Perpetual Preferred Stock: The Newest Demand Catalyst in Bitcoin” on October 20. The idea: a company sells preferred stock that pays a dividend and buys bitcoin with the money. “Altogether, more than $7 billion was raised to buy bitcoin” from March to May 2026, it says, and these products have helped buy 135,979 bitcoin as of October 5. Strategy President and CEO Phong Le shared it on X the same day, quoting its line that these preferreds “are uniquely positioned to offer higher yields than many cash and cash-equivalent investments.”

The yield part holds up. STRC pays 12.00% a year, and the 3-month Treasury bill sold on October 19 at 4.195%. The demand part has run the other way since mid-September. Strategy’s weekly 8-Ks show it bought back STRC every week from September 14 to October 18, $865.3 million in all, and sold none. The last two weeks averaged about $99.60 a share, under the $100 Strategy wants it to trade near.

Strategy’s October 15 8-K says management will recommend keeping STRC at 12.00% “until STRC has demonstrated sustained, healthy trading near $100 per share.” The buybacks came out of USD Cash, which was down to $447.3 million on October 18. And the article counts bitcoin bought with preferred money, not bitcoin sold to pay the dividends. Strategy sold 32 bitcoin in late May and 3,588 more from June 29 to July 5 for that, its 8-Ks show.

Fidelity’s own caveat is the one that matters. The model works only if bitcoin rises faster than the yield costs, and issuers are “operating under the assumption that it will.” At 12% against bills near 4.2%, that’s a high bar, with bitcoin about a third under the $125,000 high the article cites. Fidelity Digital Assets runs a bitcoin custody and trading platform. At the time of this writing, bitcoin was $82,817.