Correlation Surge Challenges Stability Narrative
According to CoinDesk, as reported by ChainCatcher, the 90-day correlation coefficient between Strategy's perpetual preferred stock STRC and Bitcoin has risen to nearly 0.70, the highest level since the product's inception in July 2025. The correlation coefficient measures the degree to which two asset prices move in sync. A reading of 0.70 indicates a strong positive correlation, meaning STRC's price now heavily tracks Bitcoin's movements. This development significantly undermines STRC's original positioning as a relatively stable yield instrument designed to offer investors a lower-volatility alternative to direct Bitcoin exposure. The product was marketed to yield-seeking investors who prefer steady dividends over price swings; now, its volatility has converged with that of Bitcoin.
Price Decline Below Par Restricts Capital Raising
This month, STRC has declined 23% to $76, far below its $100 par value. In comparison, Bitcoin has fallen nearly 20% over the same period, trading below $60,000. STRC currently offers an annualized dividend yield of 11.5% when calculated against its par value, but the actual market price depreciation means investors are receiving a higher effective yield. However, the below-par trading price creates a significant hurdle for Strategy's financing strategy. The company had previously used STRC as a vehicle to raise capital for Bitcoin purchases; issuing new shares at a discount to par would yield less net proceeds per share, making the process less efficient. This development may force Strategy to seek alternative funding sources or reduce its aggressive Bitcoin acquisition pace.