STRC depeg

4 months agoNews Editor

STRC Depeg Hits 25%: Strategy's Funding Machine Stalls, BTC Bull Market Faces Critical Risk

Strategy's preferred stock STRC has broken below $80, with the depeg widening to 25%, effectively shutting down its most efficient funding channel. The company now faces annual cash dividend obligations exceeding $1.2 billion on STRC alone, while its cash reserves of only $1.4 billion can barely cover one year of preferred dividends. Despite pivoting to common stock ATM offerings, most proceeds are diverted to replenish cash rather than buying Bitcoin, causing marginal buying pressure to plummet. If STRC fails to re-peg, Strategy may be forced to sell BTC, transforming from the largest institutional buyer into a potential seller—a massive overhang for the market. This article provides an in-depth analysis of the depeg’s origins, the funding dilemma, and the cascading impact on Bitcoin markets.

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STRC depeg

4 months agoNews Editor

STRC Continuously Deviates Nearly 25%, Strategy's Financing Machine Stalls, Threatening Bitcoin Bull Market

Strategy's preferred stock STRC has experienced a persistent deviation from its $100 par value, falling to $75.69, a 25% discount. STRC was designed as the company's cheapest and most efficient funding tool, enabling a flywheel of raising capital to buy Bitcoin, which supported the bull market. However, the deviation closes this funding channel. Meanwhile, STRC alone requires over $1.2 billion in annual cash dividend payments, while Strategy's cash reserves stand at only ~$1.4 billion, insufficient for even a year of dividends. To raise cash, Strategy has increasingly relied on common stock ATM offerings, but the proceeds are primarily used to replenish cash reserves rather than buy Bitcoin, causing BTC per share to decline from 220,900 sats to 218,046 sats. If this trend continues, the market loses its most consistent institutional buyer, and Strategy may be forced to sell BTC, posing a severe risk to Bitcoin's price. The recovery of STRC to its par value is now a critical determinant of the Bitcoin bull market.

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Bit.Fan