Jiang Zhuoer, founder of LakeBTC mining pool, noted that MicroStrategy's preferred stock STRC experienced a significant depeg, falling to a low of 73, reflecting panic in U.S. stock market funds toward Bitcoin. He analyzed that MSTR has been raising funds by issuing common stock for three consecutive weeks, but in the third week, while the amount of stock sold doubled, BTC purchases halved to 520 BTC, with most funds retained to pay STRC dividends. Jiang views this as a clear signal of pessimism about the market outlook. He expects MSTR's BTC purchases to drop sharply or even halt in the coming months, diverting funds to STRC dividends. However, he emphasized that STRC is preferred stock, not debt, requiring only dividend payments without principal repayment. MSTR's debt ratio is only about 10%, and unless a Bitcoin bear market lasts a decade, there is no risk of a 'blow-up'.
STRC Preferred Stock Depeg Raises Concerns
Jiang Zhuoer, founder of LakeBTC mining pool, recently posted that MicroStrategy's preferred stock STRC has experienced a significant depeg, with its price falling to a low of 73. This development reflects growing panic among U.S. stock market funds toward Bitcoin.
MSTR Fundraising Strategy Shift: BTC Purchases Plummet
Jiang pointed out that MicroStrategy (MSTR) has been raising capital by issuing common stock for three consecutive weeks. In the first two weeks, half of the proceeds were used to purchase Bitcoin, totaling 1,500 BTC. However, in the third week, while the amount of stock sold doubled, BTC purchases shrank to just 520 BTC, with the majority of the funds retained to cover STRC dividends. Jiang believes this is a clear signal that the company holds a pessimistic view on the future market direction.
Looking ahead, Jiang expects MSTR's Bitcoin purchase volume to decline sharply in the coming months, possibly even coming to a complete halt, as the company shifts its focus to paying STRC dividends. He also emphasized that STRC is a preferred stock, not debt, meaning the company is only obligated to pay dividends and does not need to repay principal. Currently, MSTR's debt ratio stands at approximately 10%, and unless the Bitcoin bear market lasts for a decade, there is no risk of a 'blow-up' for MSTR.
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