CZ
5 months agoNews Editor

CZ Criticizes Strategy's STRC Preferred Stock Structure as 'Too Complex', Highlights Structural Contradiction in Leveraged Bitcoin

Binance founder Changpeng Zhao (CZ) publicly criticized Strategy's STRC preferred stock structure as 'too complex', saying he needed multiple attempts to understand it. The product uses Bitcoin as underlying collateral to create leveraged exposure to BTC, but CZ pointed out a fundamental contradiction: Bitcoin's long-term appreciation thesis may be sound, but its extreme volatility makes it a challenging foundation for leveraged instruments. CZ refrained from criticizing Michael Saylor personally, calling him a 'strong Bitcoin supporter'. The comment highlights the tensions between traditional finance innovation and crypto-native risks.

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CZ Criticizes Strategy's STRC Preferred Stock Structure as 'Too Complex', Highlights Structural Contradiction in Leveraged Bitcoin
Strategy
5 months agoNews Editor

Strategy (formerly MicroStrategy) Preferred Stock MSTR Plunges 78%, BTC Dips Below Cost Basis as Whale Shifts to Defensive Mode

CryptoQuant analyst Axel Adler Jr. reports that Strategy's preferred stock MSTR has dropped 78% from its peak, while Bitcoin is down 51%. BTC has fallen below Strategy's average cost basis of $75,651 for its 847,363 BTC holdings (total cost $64.1B), the first time since the 2022 bear market. The company's buying strategy has turned defensive: weekly BTC purchases cut by two-thirds, less than 11% of a recent $335.5M stock issuance went to BTC (rest to USD reserves), and a first net sale of 32 BTC in May to pay STRC dividends. The main risk is BTC staying below the treasury cost line, which could compress MSTR premium and block ATM issuance channels. However, debt is mostly convertible bonds with no margin call risk; the baseline scenario is marginal buyer attrition, not cascading liquidation. The true tipping point is if the company shifts from selling stock to systematically selling BTC to pay dividends and interest.

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Strategy (formerly MicroStrategy) Preferred Stock MSTR Plunges 78%, BTC Dips Below Cost Basis as Whale Shifts to Defensive Mode