Bitcoin-Backed Preferred Stock Surges to $13 Billion, Expected to Reach $130 Billion

The market for preferred stock backed by bitcoin holdings has grown rapidly over the past two years and is expected to expand further. According to a report from BitcoinTreasuries.net, issued in partnership with Apyx, the combined market value of such shares now stands at around $13 billion.

This represents about 1% of the global preferred market, valued at $1.3 trillion. The report's authors predict that this share will increase to 3-5% by 2030 and potentially reach as high as 10%, or $130 billion, beyond that horizon.

Preferred shares offer a solution for companies holding bitcoin as a treasury asset, which can be volatile. By issuing preferred stock, these firms can raise long-duration capital without diluting common shareholders or taking on debt that must be repaid at a fixed date.

The yields on these securities are significantly higher than those offered by traditional fixed-income markets, with effective yields ranging from 10.8% to 15.2%. Strategy's lineup accounts for most of the market, holding around $12.5 billion in value, while Strive has issued a fifth security with a market value of approximately $330 million.

The report highlights that demand exceeds supply, but this is capped by the amount of bitcoin available as collateral. Of the 20 million bitcoins in circulation, holdings in exchanges, spot ETFs, and mining firms are excluded. This leaves around 1.26 million bitcoins held in corporate treasuries, worth about $83 billion.

Strategy alone controls around 67% of this amount, holding some 845,000 bitcoins. The report emphasizes that the security of these instruments is high due to their collateral coverage ratios, which range from 3.8 to 4.5 times.