Strategy (formerly MicroStrategy) founder and CEO Michael Saylor introduced the market to what he considers a key metric for his company's sustainability—the Bitcoin Breakeven Annual Recurring Revenue (BTC Breakeven ARR). In his analysis, he emphasizes that for the first cryptocurrency to ensure perpetual payments on preferred dividends, it only needs to grow by 3.3% annually.
This ratio is calculated very simply: annual dividend obligations are divided by the total value of cryptocurrency reserves. Currently, Strategy's annual payments amount to approximately $1.76 billion. Saylor called this metric one of the most undervalued in the context of evaluating the company's stock.
Analysis of Strategy's Model Sustainability
As of today, Strategy holds 843,775 BTC, which at the current Bitcoin price of around $63,603 is equivalent to approximately $53.8 billion. Reserves continue to grow: the May report listed 818,334 BTC, meaning the company has added over 25,000 coins since then, actively using market corrections to build positions.
Saylor clearly demonstrates that even with zero Bitcoin growth, reserves along with $2.55 billion in cash would allow the company to pay dividends for approximately 31 years. The cash "cushion" alone covers about 17 months of payments. However, as the company's dashboard data shows, the key driver here is precisely the capital appreciation from BTC's price increase.
A Critical Look at the Math
The proposed mathematical model is certainly elegant, but it is based on ideal conditions. The main assumption is that liabilities will not grow, although in practice the opposite trend is observed. In the first quarter of 2026, the volume of preferred dividends reached $229.5 million, whereas a year earlier this amount was only $10.6 million. Meanwhile, the total volume of preferred shares exceeded $13.5 billion.
Independent observers, including JPMorgan analysts, have already warned of potential risks. In their view, Strategy's current policy of selling Bitcoin could trigger market pressure of up to $1.25 billion. Moreover, on-chain data indicated a new sale of 491 BTC on July 1, with the actual transaction volume being 7 times larger.
The yield of the STRC instrument looks attractive—11.5% annually in May with a target price of $100. However, the market price of the token remains below this target, indicating risks priced in by investors, despite the low breakeven threshold.
My professional opinion: The BTC Breakeven ARR metric is a powerful tool for demonstrating sustainability, but it does not account for volatility and potential increases in debt burden. The real test for Strategy's model will come in the coming quarters, when it becomes clear what portion of dividends is covered by pure capital appreciation and what portion by direct cryptocurrency sales.