Correlation Surge Erodes Yield Stability
According to CoinDesk, 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 launch in July 2025. The correlation coefficient measures the synchronicity of price movements between two assets. A value of 0.70 indicates that STRC price movements are now highly correlated with Bitcoin, deviating from its original positioning as a relatively stable income-generating instrument. This heightened correlation exposes STRC holders to greater volatility, undermining the appeal for investors seeking yield with lower equity-like risk.
Below-Par Trading Restricts Fundraising Capacity
STRC has declined 23% in the current month to $76, well below its $100 par value. Over the same period, Bitcoin fell nearly 20% to below $60,000. STRC's current annualized dividend yield stands at 11.5%, attractive on an absolute basis, but the discount to par severely limits Strategy's ability to raise funds by issuing additional STRC shares to purchase Bitcoin. Because STRC trades below par, new issuances cannot be priced at face value, directly obstructing the company's path to lever up its balance sheet using this instrument.