CryptoSlate
Strategy's perpetual preferred stock STRC traded as low as $82.61 on June 18 before recovering to $88.59 — nearly 17% below its $100 stated amount at the intraday low. MSTR fell 3.4% to $112.53 the same session while Bitcoin slipped about 2.5% to roughly $62,730. The security is designed to hover at par through monthly dividend-rate adjustments, currently set at 11.50% annualized and paid semi-monthly in cash; at $88.59 the coupon implies an effective yield of around 13.0%, a gap that shows how far market confidence has slipped from the stated rate.
Why it matters
With roughly $10.5 billion of STRC notional outstanding, the 11.5% annual rate implies about $1.21 billion per year in dividend obligations on the preferred alone. If the market keeps pricing below par and Strategy responds by lifting the rate to 14%, the annual burden rises to roughly $1.47 billion — the dynamic critics including Peter Schiff have flagged, with Schiff calling STRC "the most obvious Ponzi." Tyler Wellener, CSO at Tyr Capital, framed the structural problem bluntly: "The capital structure has become more complex over the last year, and the market is nervous about their ability to keep everyone happy and fulfill the obligations… STRC is a confidence game in management, as it is not really backed or collateralized by Bitcoin." The trigger was thin: a 2.5% Bitcoin drawdown produced a 17% intraday swing in a security pitched as stable carry, because its mechanics depend on continuous confidence in Saylor's capital allocation rather than on a hard collateral floor.
Market impact
Ryan Haczynski, head of protocol partnerships at GlobalStake, identified two accelerants. First, tokenized STRC products and larger participants had built sizeable short positions while retail treated the instrument as low-volatility carry and added leverage; once the price slipped below key levels, margin calls triggered a cascade of liquidations that amplified the move. Second, a clip resurfaced in which Saylor acknowledged ChatGPT played a role in developing the STRC structure, which compounded selling pressure as it circulated alongside the price decline. Strategy's own prospectus warns that raising the dividend while STRC trades below par may fail to restore the price, leaving three uncomfortable paths: raise the dividend and grow the cash burden, sell Bitcoin and crack the "never sell" accumulation narrative, or issue more MSTR and dilute BTC-per-share accretion.
Frequently asked questions
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How far below par did STRC trade on June 18?
STRC hit an intraday low of $82.61 on June 18 before recovering to $88.59 — nearly 17% below its $100 stated amount. MSTR fell 3.4% the same session while Bitcoin slipped about 2.5% near $62,730.
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What is the current STRC dividend rate and how much does it cost Strategy annually?
STRC carries an 11.50% annualized dividend rate paid semi-monthly in cash. With roughly $10.5 billion of STRC notional outstanding, that implies about $1.21 billion in annual preferred dividend obligations on the instrument alone.
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Why did critics call STRC a Ponzi-like structure?
Peter Schiff called STRC "the most obvious Ponzi" because new capital appears to fund payments to existing holders, with no legal obligation to maintain the price near $100. Strategy's own prospectus warns that raising the dividend while STRC trades below par may fail to restore the price.
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What are Strategy's three main options to fix the STRC price?
Strategy can raise the STRC dividend, sell Bitcoin to fund distributions, or issue more MSTR to raise cash. Each path cuts somewhere: higher dividend grows the cash burden, BTC sales crack the accumulation narrative, and MSTR issuance dilutes BTC-per-share accretion. A buyback at a discount would be the strongest…
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What does the STRC plunge mean for other Bitcoin treasury yield products?
If STRC cannot hold par with an 11.5% dividend, $10.5B notional, and 845,256 BTC on the balance sheet, the next generation of Bitcoin-treasury products will face harder questions about collateral structures, yield sustainability, and what it means to offer yield backed by a non-yielding asset. STRC becomes the…
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