Strategy's preferred stock STRC slid to an intraday low of $82.53 last week and closed Monday near $88.65, roughly 11% below its $100 reference price. Social media users quickly invoked the word "depeg," drawing parallels to Terra's UST collapse in 2022 that wiped out about $40 billion.
Two features fuel the comparison. STRC is engineered to trade around $100, and it pays an 11.5% annual dividend—a high yield that echoes Terra's Anchor protocol, which advertised 20% before imploding. Yet Benchmark-StoneX analyst Mark Palmer dismissed the analogy in a Monday note.
Not a Stablecoin, No Peg to Defend
"STRC is not a stablecoin," Palmer wrote. A stablecoin pledges a fixed $1 value, but STRC is a preferred stock designed to trade near $100 with no obligation to stay there. "What happened is best described as a market-driven reset of required yield," he added.
Mechanics Are Worlds Apart
UST relied on an algorithmic mint-and-burn loop with its sister token LUNA, backed by no hard reserves. When trust broke, the loop spiraled, and both tokens collapsed. STRC lacks any such self-reinforcing mechanism. It is indirectly backed by Strategy's 847,363 Bitcoin (worth about $54.5 billion).
The drop does affect Strategy's capital-raising engine. When STRC trades at or above $100, the company can issue new shares to buy more Bitcoin. Below that level, the channel shuts down, which is why Strategy has paused issuance. Still, Palmer stressed the price decline reflects yield repricing, not a structural failure.