Key facts
- Strategy Inc.'s perpetual preferred stock, STRC, has a 90-day correlation with bitcoin nearing 0.70, the highest since its July 2025 debut.
- STRC has fallen 23% to $76 this month, while bitcoin has dropped nearly 20% to below $60,000.
- The stock was designed as a hybrid product paying monthly cash dividends with a current annualized rate of 11.5%.
- Strategy holds 847,363 BTC worth $50.4 billion.
- STRC trades significantly below its $100 par value, limiting Strategy's ability to raise funds for bitcoin purchases.
Strategy Inc.'s perpetual preferred stock, STRC, is exhibiting its strongest correlation with bitcoin since its debut in July 2025, with the 90-day correlation coefficient nearing 0.70. This development comes as both STRC and bitcoin have experienced significant price declines this month. STRC has fallen 23% to $76, while bitcoin has dropped nearly 20% to below $60,000.
STRC, also known as 'Stretch,' was designed as a hybrid investment offering monthly cash dividends and a variable rate, currently at 11.5% annualized. The stock's par value is $100. However, its current trading price significantly below par limits Strategy's ability to raise funds through at-the-market offerings to purchase additional bitcoin. Strategy, which holds 847,363 BTC valued at $50.4 billion, has reportedly made small bitcoin sales to cover dividend obligations, a departure from its previous 'never sell' stance.
The increasing correlation with bitcoin undermines STRC's role as a steadier income vehicle and alters the risk profile for investors. While some market observers see the discount as a potential entry point for yield-focused investors, others express concern that sustained weakness could strain Strategy's capital structure and impact its bitcoin accumulation strategy. The company reportedly has 10 months of cash reserves for dividend payments.