Strategy's BTC yield has fallen to negative 3.7%, even as its growing preferred-stock business adds hundreds of millions in annual dividend costs.

Strategy posted a record $20.9 billion in third-quarter operating income as Michael Saylor declared a new Bitcoin bull market.

The company's Oct. 29 financial results showed net income of $19.5 billion, compared with roughly $2.8 billion a year earlier. The record operating income came almost entirely from a $20.9 billion gain from changes in the fair value of its Bitcoin holdings.

The results reinforced Saylor's optimism about Bitcoin's prospects. He said banks were increasingly embracing the cryptocurrency, institutional demand had returned, and Bitcoin was trading 21% above its 200-week moving average.

His assessment comes as Strategy has expanded its Bitcoin holdings by 26% this year to 848,517 BTC, worth approximately $68.9 billion at the company's Oct. 23 reference price.

However, that accumulation has not translated into stronger Bitcoin exposure per share, raising questions about the effectiveness of its increasingly complex financing strategy.

Despite its record earnings, Strategy reported a -3.7% year-to-date BTC yield as of Oct. 25, a sharp reversal from the 4.5% reported in July.

The 8.2-percentage-point deterioration occurred even as its Bitcoin holdings increased from 843,775 BTC in late July to 848,517 BTC in October.

Strategy's BTC yield measures the percentage change in Bitcoin holdings per assumed diluted share, assessing whether its accumulation is outpacing potential dilution rather than tracking actual shareholder investment returns.

The deterioration also showed up in Strategy's other performance indicators.

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