On July 7, Michael Saylor, founder and CEO of Strategy (formerly MicroStrategy), presented the market with perhaps one of the most undervalued yet critically important metrics of his business model — the BTC Breakeven ARR. According to his analysis, for the company to service its preferred dividends indefinitely, the first cryptocurrency only needs to grow by 3.3% per year.
The Math of Breakeven and the Numbers on the Balance Sheet
The calculation of this ratio is elegantly simple: annual dividend obligations are divided by the total value of cryptocurrency reserves. Currently, Strategy's annual payments amount to approximately $1.76 billion. The company holds 843,775 BTC, which, at the current price of around $63,603, is equivalent to roughly $53.8 billion. In the May report, by the way, the figure was 818,334 BTC — meaning that during the market correction, the portfolio grew by more than 25,000 coins.
Saylor emphasizes that if Bitcoin grows faster than this 3.3% per year, the capital appreciation will allow Strategy to pay dividends on its preferred shares indefinitely. The company's chart clearly demonstrates: even with zero BTC growth, reserves, along with $2.55 billion in cash, provide payments for approximately 31 years, and the cash cushion alone will last 17 months. Practice confirms the theory — Strategy has already paid 23 consecutive quarterly distributions, and since the start of 2025, total payments have exceeded $693 million.
A Critical View: Risks and Reality
However, any mathematical model is built on ideal assumptions. The main stumbling block is the assumption that obligations will not grow. In reality, the opposite is happening: in the first quarter of 2026, the volume of dividends on preferred shares reached $229.5 million, whereas a year earlier this amount was only $10.6 million. The total volume of preferred shares has exceeded $13.5 billion.
Independent analysts, particularly from JPMorgan, 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 recorded a new sale of 491 BTC on July 1, which later turned out to be 7 times larger than initial estimates.
The yield on the STRC instrument looks attractive (11.5% annually in May), but its market price remains below the target mark of $100. It is evident that investors are pricing in potential risks, despite the low breakeven threshold.
Expert Opinion: The BTC Breakeven ARR of 3.3% is a powerful marketing and analytical argument demonstrating the resilience of Saylor's model. However, the real test of strength will come in the upcoming financial periods. The main question is not whether Bitcoin can grow by 3.3% per year (this is almost guaranteed over the long term), but rather what portion of the burden will fall on direct cryptocurrency sales and what portion will be covered by pure capital appreciation. While the market values STRC at a discount, investors seem to be pricing in precisely this operational risk.