Michael Saylor, executive chairman of Strategy, has introduced a dividend model utilizing unrealized Bitcoin gains. The company uses Return of Capital (ROC) distributions, which under US federal tax rules are treated as a return of investment rather than profit, allowing investors to defer tax payments.
For the 2025 fiscal year, Strategy confirmed that 100% of distributions on its Digital Credit preferred equity instruments qualify as nontaxable ROC. The company has raised over $7.4 billion in gross proceeds through preferred issuances as of mid-2026, with a significant portion used to acquire Bitcoin.
Strategy has paid $413 million in cumulative distributions at a blended annual rate of approximately 9.6%. For 2026, the company adjusted the annualized rate on its STRC preferred instrument to 12% to attract capital, while also conducting sales and monetization of Bitcoin holdings to support these payouts.
The company continues to leverage capital markets to fund its Bitcoin accumulation strategy. While the ROC structure provides tax deferral, the company notes that future tax treatment depends on its annual tax position, and the sustainability of payouts remains linked to the monetization of its Bitcoin reserves.
