Strategy raises $16B through Bitcoin-backed credit products without triggering a tax bill

Here’s a neat trick: hold hundreds of thousands of Bitcoin, borrow against it instead of selling it, and never trigger a taxable event. That’s essentially what Strategy Inc. has been doing, raising roughly $16 billion in total debt and preferred obligations this year without owing taxes on any of it.

Selling Bitcoin creates a capital gain. Borrowing against Bitcoin does not. By issuing a mix of equity, convertible debt, and preferred stock rather than liquidating its crypto holdings, Strategy has built a capital machine that feeds on leverage instead of realized profits.

How the money machine works

Strategy, which rebranded from MicroStrategy in February 2025, has raised approximately $21 billion through various financial instruments. That includes common equity issuances, convertible debt offerings, and a notable $2.5 billion perpetual preferred stock issuance.

The perpetual preferred shares, branded as Stretch (STRC), offer investors an approximate 11.5% dividend yield.