Analyst: “Strategy has been the single biggest factor” for bitcoin’s recent rally

Bitcoin moved past the $77,000 level on Wednesday morning but dropped back below as US markets opened.

Matt Hougan, Bitwise’s CIO, wrote in a blog post that bitcoin’s rally, up 20% from February lows, was “brought by STRC,” Strategy’s perpetual preferred equity instrument, launched in July 2025. STRC’s proceeds have enabled the largest bitcoin holder to maintain its acquisition pace despite bitcoin’s tumble. It now holds 818,334 bitcoin, overtaking BlackRock’s iShares Bitcoin Trust in holdings earlier this month.

In his post, Hougan contends that while bitcoin ETFs have played a part in supporting the bitcoin price, “Strategy has been the single biggest factor, having added $7.2 billion in bitcoin over the past eight weeks.”

In comparison, since March 1, ETFs have bought $3.8 billion, Hougan told Sherwood News.

“I wish ETFs were the primary driver; it would be better for my business, since I build and sell ETFs,” Hougan said.

Tyler Rowe, head of video at BitcoinTreasuries.net, pointed to another factor supporting Hougan’s argument: STRC is a new class of bitcoin buyer, not just cheaper capital for Strategy. Rowe told Sherwood that according to Strategy CEO Phong Le, roughly 80% of STRC’s value is held by retail investors, including HNWIs and family offices.

“The real institutional demand hasn’t arrived yet,” Rowe said, adding that ETF flows are reactive. They tend to follow price action, while STRC issuance is proactive; Strategy raises capital and buys regardless of sentiment.

“That distinction makes STRC a more durable marginal buyer of bitcoin,” Rowe said.

When asked how long the “STRC factor” can help bitcoin’s price, Hougan told Sherwood that he does not think Strategy has reached the end of the STRC road, as it could easily issue another $5 billion to $10 billion.

“I don’t know if it will be enough to lift bitcoin above $80,000, but it sure will help,” Hougan said.

Mark Palmer, an equity research analyst and Benchmark’s managing director, echoed Hougan’s sentiment, saying that while flows remain very important, Strategy’s purchases are different because they can be concentrated, programmatic, and very large over short windows. 

He too argued that STRC will continue to contribute to Strategy’s bitcoin acquisition effort, as long as it trades close enough to par for the company to issue it efficiently.

“STRC’s staying power comes from a value proposition that includes a high yield, monthly income, and collateral coverage multiple times over from Strategy’s bitcoin holdings,” Palmer said.

In terms of bitcoin’s trajectory, Hougan told Sherwood that we’re currently in a channel, between roughly $60,000 and $80,000, representing the previous low and the average short-term cost basis.

“My base case for the next month is that we’ll bounce around these levels as we lay the groundwork for a strong second half of the year. I do think there is a chance, however, that institutional buying lifts us above $80K and we push much higher,” Hougan said.

Meanwhile, other analysts have a more nuanced view about STRC’s role in bitcoin’s trajectory, noting that while Strategy’s purchases are key, they also hinge on several factors.

“The math is hard to argue with. $7.2 billion from Strategy versus $3.8 billion from spot ETFs over a comparable window. [But] Strategy can only buy when there’s a willing market for STRC, which in turn depends on a constructive BTC tape, i.e., BTC going higher. Strategy is amplifying the setup, but not manufacturing it,” Wave Digital Assets’ head of international portfolio management, Rajiv Sawhney, told Sherwood.

Sawhney, however, agrees with Hougan’s framework, which views total obligations as a percentage of bitcoin holdings, saying they’re at 33% today, with room to move toward 50% “before investors balk.”

At current prices, he said, that translates into another $10 billion to $15 billion of potential issuance, which is “substantial.”

“So a move through 80K is well within reach if STRC demand holds. The keyword is reflexive: STRC demand depends on confidence in both BTC and the strategy’s balance sheet. In a calm or rising tape, the flywheel works. In a sharp drawdown, it can reverse quickly,” Sawhney said.

The same can be said of bitcoin ETF flows; while they have been a significant driver of the asset’s price since the Iran war began, helping bitcoin navigate macro- and geopolitics-led volatility, several analysts pointed out that a sustained reversal could quickly undermine support.

Sawhney said that ETF flows are broad-based and reflect allocation decisions across thousands of investors, making them a structurally more durable form of buying demand. But he added that the reflexivity goes both ways: bitcoin’s inability to break and hold above $80,000 this week led to a decent amount of real-money/structural flow selling.

“Strategy is a single concentrated buyer using capital market leverage. In raw dollar terms over the last two months, Strategy is bigger; in long-run significance for bitcoin’s institutionalization, ETFs are bigger. Both matter, but they do different jobs,” he said.

Bitcoin ETFs, which had been on a roll, saw their second consecutive day of outflows Tuesday, ending a nine-day positive run, their longest winning streak since early October, per SoSoValue. Still, so far this month, they’ve registered $2.09 billion in inflows, their best month since October.

Finally, some analysts argued that while Strategy “can smooth the market at the margins, it won’t dictate direction,” Kyle Rodda, senior market analyst at Capital.com, told Sherwood.

Rodda said the most important tailwinds for bitcoin lately have been the recovery in risk assets, especially tech stocks, and its resilience during recent periods of high volatility.