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🩸BEARISH WuBlockchain

STRC, SATA Drop a Leverage Liquidation, Not a Credit Issue: Strive

The intraday cascade in both preferreds looked like a solvency event, but Cole frames it as forced selling from leveraged holders — and credits strong intraday buying at the lows for the recovery.

Strive CEO @ColeMacro described the session as the most difficult day in Digital Credit's history, after STRC fell as low as $82.50 and SATA dropped from par into the low 90s before sharply rebounding.

Cole attributed the move to a leverage liquidation event rather than any deterioration in underlying credit quality, with forced selling triggering a cascade. He stressed that issuers' credit profiles remain strong, Strive's dividend reserves are intact, and the company is not under stress.

Why it matters

The shape of the move — a sharp drawdown followed by a sharp recovery — is the classic fingerprint of a deleveraging event rather than a fundamental re-pricing. When leveraged holders are forced to sell, price dislocates below intrinsic value before marginal buyers step in, which is the pattern both STRC and SATA traced on the day.

Market impact

Cole pointed to significant buying near intraday lows in both instruments as evidence the dislocation was technical, not structural. The framing matters for holders: a leverage cascade can repeat if leverage rebuilds, even when the underlying credit thesis is unchanged.

#Strive#LeverageLiquidation#PreferredStock#DigitalCredit

Frequently asked questions

  1. What happened to STRC and SATA on the most difficult day?

    STRC fell as low as $82.50 and SATA dropped from par into the low 90s before sharply rebounding, according to Strive CEO @ColeMacro.

  2. Why did Strive's preferreds drop so sharply?

    Cole attributed the move to a leverage liquidation event, with forced selling triggering a cascade, rather than any deterioration in underlying credit quality.

  3. Is Strive under financial stress?

    Cole said issuers' credit profiles remain strong, Strive's dividend reserves are intact, and the company is not under stress.

  4. How did Strive's preferreds recover so quickly?

    Cole pointed to significant buying near intraday lows in both STRC and SATA as evidence that buyers stepped in once forced selling exhausted.

  5. Could a leverage liquidation like this happen again?

    The pattern can repeat if leverage rebuilds among holders, even when the underlying credit thesis is unchanged, making positioning rather than fundamentals the trigger.

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