CoinDesk
Strategy's preferred stock STRC slid to a record intraday low near $82.53 last week before closing around $88.65 on Monday, roughly 11% below its $100 target. The slide revived social media comparisons to Terra's UST, the algorithmic stablecoin whose 2022 collapse erased about $40 billion in value. The parallel has gained traction because STRC pays an 11.5% annual dividend, a yield that echoes the 20% return Terra's Anchor protocol advertised before it imploded.
Why it matters
Benchmark Research analyst Mark Palmer argued in a Monday note that the comparison misreads what STRC actually is. STRC is a dividend-paying preferred share engineered to trade near $100, not a stablecoin, and it never promised a fixed value, so by definition it cannot "depeg." UST was algorithmic, held its dollar value through a mint-and-burn loop with sister token LUNA, and had no hard reserves; STRC is backed indirectly by Strategy's bitcoin hoard, which the company said Monday totals 847,363 coins worth about $54.5 billion. "What has happened with STRC is best described not as a depeg, something that was never pegged cannot be depegged, but as a market-driven reset of required yield," Palmer wrote.
Market impact
The price drop does have a real consequence: Strategy's bitcoin-buying engine pauses when STRC trades below $100, since the company only issues new shares and converts proceeds to BTC at or above that level. Palmer called that channel "less efficient," but stopped short of calling the broader model broken, and Benchmark reaffirmed its $570 price target on MSTR, well above the roughly $457 high reached in October. MSTR itself fell 2.8% to $109 on Monday for a fifth straight down day, signalling investors are still parsing the funding path even as the underlying BTC treasury keeps compounding.
Frequently asked questions
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Is Strategy's STRC a stablecoin?
No. STRC is a preferred stock engineered to trade near $100, not a stablecoin. It pays an 11.5% annual dividend and has no fixed-value peg, so by definition it cannot "depeg" the way Terra's UST did.
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How is STRC different from Terra's UST?
UST was an algorithmic stablecoin held at $1 through a mint-and-burn loop with sister token LUNA, backed by no hard reserves. STRC is a dividend-paying preferred share indirectly backed by Strategy's 847,363 bitcoin holdings, worth about $54.5 billion as of Monday.
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Why did STRC drop below $100?
STRC fell as low as $82.53 intraday last week and closed around $88.65 on Monday, roughly 11% below its $100 target. Benchmark analyst Mark Palmer described the move as a market-driven reset of the yield investors now require, not a structural break.
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What happens to Strategy's bitcoin buys when STRC is below $100?
Strategy's BTC-buying engine only issues new STRC shares and converts the proceeds into bitcoin when the stock trades at or above $100. Below that level the channel is paused, which is why purchases have stalled during the recent slide.
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What is Benchmark's call on MSTR?
Benchmark reaffirmed a $570 price target on MSTR, well above the roughly $457 high reached in October. The firm views the STRC slide as a funding-path question, not a break in Strategy's broader bitcoin-treasury model.
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