According to an article by Xiaobing for TechFlow, Michael Saylor presented STRC to Wall Street last July as a “digital credit engine.” The structure was simple in appearance but ambitious in purpose: investors would buy a preferred stock carrying an annual dividend of 11.5%; Strategy would use the proceeds to purchase Bitcoin; if Bitcoin rose and STRC stayed close to its $100 par value, the company could issue more shares, raise more cash, and buy more Bitcoin. In that closed loop, capital was supposed to keep circulating.
Less than a year later, that engine is facing visible strain. On June 19, STRC fell intraday to $85.32, setting a new record low. In the previous trading session, it had touched $82.53, a discount of more than 17% to par. Its RSI dropped to 24, placing it in the extremely oversold range, while trading volume surged to nearly 8 million shares, far above the average daily volume of 3.6 million shares. For a preferred stock designed to remain near $100, trading near $85 shows that the assumptions behind the structure are under pressure.
STRC Was Built as a Core Financing Gear for Strategy
STRC stands for Variable Rate Series A Perpetual Stretch Preferred Stock. It was listed in July 2025 at an issue price of $90, with roughly 28 million shares issued and $2.5 billion raised. Its dividend rate is adjusted monthly and is currently set at 11.5%. The intended design was clear: use a floating-rate mechanism to help keep STRC trading close to its $100 par value.
When STRC trades above $100, Strategy can issue additional shares through an ATM, or at-the-market, program. The company can convert the premium into cash and deploy that cash into Bitcoin purchases. In Saylor’s capital machine, MSTR common stock absorbs Bitcoin’s volatility, while STRC provides a recurring source of funding. In its proxy statement this April, Strategy highlighted the strength of that machine: STRC had a market value of $6.4 billion, 30-day average trading volume of $339 million, and volatility of only 1.7%. Saylor described it as a “non-cyclical financing tool,” meaning that the engine was meant to keep running regardless of Bitcoin’s short-term direction.
Bitcoin’s Decline, Dividend Coverage, and SATA Competition
The decline in STRC reflects three reinforcing pressures. The first is the sharp fall in Bitcoin. BTC has dropped from its all-time high last October to around $63,000, a decline of more than 50%. On June 17, the first FOMC meeting chaired by new Federal Reserve Chair Kevin Warsh delivered a hawkish signal. The dot plot showed that nine officials expected rate hikes in 2026, the PCE inflation forecast was raised to 3.6%, and forward guidance on interest rates was fully removed. On that day, Bitcoin decoupled from U.S. equities: the S&P 500 and Nasdaq rallied on news of a U.S.-Iran peace agreement, while BTC moved lower.
The second pressure is dividend coverage. In May, Strategy used $1.5 billion in cash to repay convertible debt due in 2029. That move reduced the coverage period for STRC dividends from 24 months to roughly 7 months. With 28 million STRC shares, an annualized dividend rate of 11.5%, and a $100 par value, the company needs to pay more than $320 million in cash dividends each year. After cash reserves declined, the market began focusing on where those payments would come from.
The answer was disclosed on June 1. Strategy said that between May 26 and May 31, it sold 32 Bitcoin at an average price of $77,135, raising about $2.5 million to pay STRC dividends. It was Saylor’s first Bitcoin sale since 2022. The sale was tiny relative to Strategy’s holdings of 840,000 Bitcoin, accounting for less than 0.004% of the total, and the dollar amount was only $2.5 million. Saylor described the move as “inoculation,” saying that a voluntary sale would help the market get used to the idea and remove fear-driven expectations. The market did not respond favorably: MSTR fell more than 4% after hours. For investors, the key issue was not the size of the sale, but the change in the narrative from “never sell Bitcoin” to selling Bitcoin to pay dividends.
The third pressure comes from Strive’s SATA, a competing Bitcoin-backed preferred stock. SATA is also supported by Bitcoin and is currently trading close to its $100 par value. Its annualized yield is about 13%, above STRC’s 11.5%. Its payment structure is also more frequent: beginning June 16, SATA shifted to paying dividends every business day, compared with STRC’s semi-monthly dividend schedule. Strive has no outstanding debt, and SATA sits at the top of its capital structure, without needing to compete with convertible bondholders for cash flow. The spread between STRC and SATA has widened to about $15, a record gap between the two Bitcoin-backed high-yield preferred stocks.
The Flywheel Has Reversed
The chain reaction caused by STRC falling below par is almost a mirror image of the mechanism Saylor originally designed. The positive loop was: STRC trades above $100, Strategy issues through the ATM program, cash flows in, the company buys Bitcoin, Bitcoin rises, STRC remains stable, and the company issues again. The reverse flywheel now looks different: Bitcoin falls, STRC drops below par, the ATM program pauses, the financing channel closes, Bitcoin is sold to pay dividends, investor confidence weakens, and STRC declines further.
Strategy has already paused its premium issuance plan for STRC. That means the company has lost an important tool for acquiring additional Bitcoin. At the same time, bearish activity in the STRC options market has increased. Saylor has offered a counterargument in recent public appearances: for every 1 BTC sold to pay dividends, he said Strategy can buy back 10 to 20 BTC through other capital operations. He also said the overall model only needs Bitcoin to rise 2.3% per year to keep running indefinitely.
The numbers remain large. Strategy currently holds more than 840,000 Bitcoin at an average cost of about $75,540. With Bitcoin trading near $63,000, the company has an unrealized loss of more than $10 billion, and it already recorded a net loss of $12.54 billion in Q1. Saylor’s mathematical argument is still built around capital efficiency and long-term Bitcoin appreciation. The market, however, is trading the visible signals: STRC’s price deterioration, the shorter dividend coverage window, the sale of Bitcoin for dividend payments, and the widening spread versus SATA.
The Test Is the Bitcoin Treasury Company Model
STRC falling to $85 does not immediately threaten Strategy’s survival. Preferred stock ranks above common equity and below debt in the capital structure, so bondholders are not directly affected. Saylor’s 840,000 Bitcoin holdings are also not subject to forced liquidation as described in the source article. What is being tested is more fundamental: whether the Bitcoin treasury company model can keep its financing machine running during a bearish phase.
Last year, STRC was one of Saylor’s most notable financial inventions, a product designed to let traditional fixed-income investors participate in the Bitcoin narrative. Today, it functions as a lens on the fragility of leveraged strategies when the cycle turns. The original TechFlow article also listed its official community channels, including the Telegram subscription group at https://t.me/TechFlowDaily, the official Twitter account at https://x.com/TechFlowPost, and the English Twitter account at https://x.com/BlockFlow_News. With the Federal Reserve sending a hawkish signal, rate-hike expectations reappearing, and the Fear and Greed Index falling to 22, classified as extreme fear, Saylor’s claim that a 2.3% annual Bitcoin gain is enough to keep the model operating is now being tested by STRC’s market price.