CZ Says STRC Structure Is 'Overly Complex'
According to BlockBeats, on June 29, Binance founder and former CEO Changpeng Zhao (CZ) shared his views on Strategy's preferred stock STRC during an interview. CZ stated that the STRC structure is "overly complex," adding that he "tried many times to understand STRC" before grasping its operation.
STRC is a preferred equity product whose value is linked to Bitcoin's price, but with embedded leverage that amplifies gains or losses. CZ believes that while the design seems novel, it adds unnecessary complexity and risk, especially during extreme crypto market volatility, making it difficult for investors to accurately assess risk.
Structural Contradiction of Bitcoin as Collateral
CZ further noted that STRC's core reliance on Bitcoin as underlying collateral introduces a fundamental structural contradiction. While Bitcoin's long-term appreciation thesis is reasonable, its short-term volatility makes it a challenging base for leveraged instruments. When Bitcoin drops sharply, STRC may face liquidation risk, with leverage amplifying losses; in a bull market, leverage can boost returns, but investors must endure the psychological toll of price swings.
CZ's remarks imply that although Bitcoin is a strong long-term store of value, its volatility makes it unsuitable as underlying collateral for complex leveraged financial products without additional risk buffers.
CZ on Michael Saylor's Role
Despite criticizing the product structure, CZ explicitly declined to comment on Michael Saylor's personal credibility, calling Saylor a "staunch Bitcoin supporter." Saylor has continued to accumulate Bitcoin through Strategy and launched Bitcoin-collateralized financial products to drive institutional adoption. CZ's balanced assessment affirms Saylor's contributions to the crypto space while maintaining objectivity.