Strive buys 2,000 more bitcoin with its Sept. 30 stack about $117 million below cost

Most of Strive's paper loss sits in coins it owned before July. The company held 28,000 bitcoin on Sept. 30 at an average acquisition cost of $90,170 ^[3]. At the roughly $86,000 where bitcoin traded Monday ^[2], that stack was worth about $117 million less than it cost ^[16]. The 8,137 coins bought in the third quarter came in at an average of $78,885 ^[10] and are above water. Take them out and the 19,863 coins held before July carry an implied average cost of about $94,800 ^[17].

Last week's 2,000 coins, at about $84,422 each ^[1], are roughly $3 million in the money at Monday's price ^[18]. Every coin bought below $90,170 pulls the average toward the market ^[2]. Strive is averaging down with outside money, or rather with money raised mostly through a preferred stock that costs it about 13% a year ^[12].

Decrypt reports that the filing lists $284.7 million in cash and no debt ^[9]. Cole's account of the week, though, puts new capital behind the purchase. Cole announced the buy on Oct. 5, the day Strive filed its 8-K ^[7]. He said 61.5% of the capital raised during the week came through SATA, and warrant exercises brought in another $56.7 million ^[4]. The warrants alone covered about a third of the $168.8 million purchase ^{[5] [19]}. SATA's share had been 85% in the week ending Sept. 25 and 70% in the week ending Sept. 4 ^[11].

SATA has a $100 stated amount and pays about 13% a year at an adjustable rate, with dividends every business day on a schedule the company said would start June 16 ^[12]. Bitcoin pays no interest, so those dividends have to come from Strive's cash or from raising more money, as Decrypt notes ^[13]. At 13%, the $284.7 million would cover one year of dividends on about $2.19 billion of SATA ^[20]. The filing does not say how much SATA is outstanding.

Cole's ambitions are larger than the cash. He has said second place among public bitcoin holders is possible by year-end, though it is not his base case ^[14]. Strive is fifth, 14,052 coins behind Twenty One's 43,514 ^[6]. At $86,000 a coin, closing that gap costs about $1.21 billion ^[21], roughly 4.2 times the cash on hand ^[22], and that assumes Twenty One buys nothing in the meantime. Management also wants its Amplification Ratio, 55.3% at quarter-end, pushed above 60% and held there while bitcoin is below $100,000 ^[15].

There are three ways this goes. Bitcoin could recover past $90,170 and close the paper loss without Strive doing anything ^[2]. SATA could keep selling at around 13% while the cash is kept for the dividend ^[12]. Or SATA demand could thin, leaving the $284.7 million to pay for coins and dividends at once ^[9]. I think the second is the near-term path, because management set its 60% target specifically for a market below $100,000 ^[15]. The view is wrong if SATA's share of weekly capital keeps sliding from 85% ^[11] and the cash balance in Strive's 8-K filings starts falling while purchases stay near 2,000 coins a week.