Disclaimer: The analyst who wrote this piece owns shares of Strategy (MSTR).

Over the past two weeks, Strategy (MSTR) has refrained from utilizing the at-the-market (ATM) equity program on its common shares to fund bitcoin BTC purchases, choosing instead to use the programs on its two perpetual preferred stocks.

The choice most likely reflects the narrowing premium between the company’s share price and its multiple net asset value (mNAV) or, more colloquially, the difference between its market cap and the value of its bitcoin holdings, and allows Strategy to raise funds to buy more BTC without diluting shareholders’ stakes in the company.

When the share price trades close to the underlying bitcoin asset value, issuing common shares via ATM becomes less attractive. Such offerings are typically only advantageous when executed at a meaningful premium.

Strategy funded its most recent 1,045 BTC purchase using proceeds from its two perpetual preferred stock ATMs: 59.18% from the STRK offering and 40.82% from the STRF one. These preferred stocks have demonstrated strong lifetime returns of 35% for STRK and 24% for STRF. This gives the company greater flexibility to continue accumulating bitcoin while preserving upside for common stock investors.

There’s also an additional dynamic at play, according to analyst Jeff Walton. The effective dividend yields of STRK and STRF have steadily declined from about 10% even though the yield on the benchmark U.S. 10-year Treasury has remained relatively constant at 4.5%. That’s because the dividend yield falls as the price of the stock increases, a bond-like behavior that makes the preferred shares more attractive in a stable rate environment.

Strategy is likely to reengage the ATM on its common stock if the share price rises significantly, particularly if it exceeds twice the mNAV, which would allow room for dilutive issuance at a premium. While the common stock ATM remains the primary mechanism to fund dividend obligations on the preferred shares, Strategy retains the option to use the preferred stock ATMs for this purpose as well, depending on market conditions.

Bitcoin BTC miner Riot Platforms (RIOT) said it sold 1.75 million shares of rival Bitfarms (BITF) for about $1.58 million as part of a continuing review of its investment in the company following an unsuccessful takeover bid that saw its stake in the company rise to almost 15%.

The shares, sold on June 9 over the Nasdaq and other open markets, fetched a weighted average price of about $0.90 per share and reduced Riot’s beneficial ownership to 14.3%, the company said.

The hostile takeover bid became public in May 2024, with Riot offering to buy Bitfarms for $2.30 per share, an approach that was swiftly rejected and abandoned the following month. Riot continued to buy its rival’s shares to exert pressure on the board to engage with the miner. Bitfarms subsequently implemented a shareholder rights plan or «poison pill» to deter Riot from buying the company.

Riot emphasized that it remains committed to evaluating its position in Bitfarms based on a number of evolving factors. These include potential discussions with Bitfarms’ management, the company’s strategic trajectory, and broader market conditions. Riot said it may increase or decrease its holdings in the future depending on such considerations.

Bitfarms stock rose 4% in pre-market trading to $0.96. Riot rose 0.49% to $10.17.

SG Forge, the cryptocurrency division of French bank Société Générale, plans to introduce a dollar-backed stablecoin on the Ethereum and Solana blockchains, the bank said on Tuesday.

The USD CoinVertible (USDCV) will start trading in early July and involves Bank of New York Mellon acting as reserve custodian for the token.

As crypto rules coalesce around the globe, pressure is mounting on banks to take part in the integration of fiat-pegged stablecoins into mainstream finance (TradFi). SocGen, something of a stablecoin pioneer with its euro-backed EURCV token, says it is the first global banking group to issue a public stablecoin tied to the U.S. dollar.

The involvement of BNY Mellon enables seamless integration between traditional and digital financial ecosystems, SG Forge said in a press release.

“After the release of a MiCA-compliant EUR stablecoin (EURCV), the launch of a U.S. dollar version was the obvious next step for Societe Generale–FORGE as market adoption of stablecoins is growing exponentially,” SG Forge CEO Jean-Marc Stenger said in the statement, referring to the European Union’s Markets in Crypto Assets regulations.

Stablecoins, digital tokens whose value is pegged to a real-world asset, are used extensively for crypto trading and other applications. The market is dominated by Tether’s USDT, with a market cap of about $155 billion, according to CoinDesk data. USDC, issued by Circle (CRCL), is No. 2 with a market cap of $60 billion.

“The stablecoin market remains largely U.S. dollar denominated. This new currency will enable our clients, either institutions, corporates or retail investors, to leverage the benefits of an institutional-grade stablecoin,” he said in a statement.

USD CoinVertible and EUR CoinVertible are designed to support a wide range of client activities, the bank said, including crypto trading and cross-border payments, on-chain settlement, foreign exchange transactions and collateral and cash management.

Neither USD CoinVertible nor EUR CoinVertible are available to «U.S. Persons,» SG Forge said.