Strategy pioneered the corporate Bitcoin treasury model in 2020, helping turn company balance sheets into a nearly $100 billion source of Bitcoin demand.
Strategy pioneered the corporate Bitcoin (BTC) treasury model in 2020, helping turn company balance sheets into a nearly $100 billion source of Bitcoin demand. Now the company, formerly MicroStrategy, is trying to do the same for Bitcoin-linked credit.
The key instrument is STRC, or “Stretch,” a perpetual preferred stock issued by Strategy. The Nasdaq-listed security pays a monthly cash dividend and is designed to trade near a $100 par value.
For investors, the pitch is a double-digit yield tied to the world’s largest corporate Bitcoin holder. For Strategy, STRC offers a way to raise billions for Bitcoin purchases without relying on common-stock sales or convertible debt.
Saylor says STRC should be among Strategy’s core fundraising tools. Source CoinMarketCap
Strategy’s New Financing Engine
The instrument has quickly become central to Strategy’s Bitcoin-buying machine. In May, the company said it bought 24,869 BTC for about $2.01 billion, bringing its holdings to 843,738 BTC. The purchase was funded mostly through STRC sales.
Strategy says it has already issued more than $10 billion worth of STRC. As of mid-May, it reportedly had about $17.5 billion remaining under a $21 billion at-the-market program, which allows the company to sell shares into the market over time.
This marks a sharp shift in Strategy’s financing design. Its first Bitcoin buying spree was fueled by convertible debt, and it still has about $6.7 billion of notes outstanding, filings show. Those notes mature between 2028 and 2032, potentially creating repayment or refinancing pressure.
“We want to be debt-free completely,” said executive chair Michael Saylor during Strategy’s May 5 earnings call. He added that his ideal structure would be “one common equity, one monthly (or semi-monthly) variable preferred equity, and a big stack of Bitcoin.”
This is not empty talk. On May 26, Strategy repurchased $1.5 billion of its 0% convertible notes due 2029, cutting its cash reserve to about $871 million. Strategy has also issued other preferred-stock instruments, including STRK and STRD.
Saylor has called STRC Strategy’s “iPhone moment.” Investors have embraced the instrument, and some analysts say it could become a building block for a Bitcoin-linked credit market.
STRC offers investors a double-digit annualized yield. Source: Strategy
How STRC Works
STRC combines features of equity and debt. As of May, Strategy says STRC offers an 11.50% annual dividend, payable monthly in cash, with the rate adjustable based on market conditions.
Unlike debt, STRC does not have to be repaid at maturity. Holders who want to exit can sell shares in the secondary market, including on public exchanges, rather than requiring Strategy to redeem them. That reduces the pressure Strategy faced with convertible notes.
Strategy does not stake Bitcoin or run other large-scale income-generating strategies. It must fund STRC’s dividend from cash reserves, new capital raises or, if needed, Bitcoin sales. Investors are betting that Strategy can manage that balancing act while continuing to grow Bitcoin per share for MSTR holders.
The tension is already visible. On May 5, Strategy reported a more than $12 billion first-quarter loss as Bitcoin declined. It also publicly teased the idea of selling some of its Bitcoin for the first time, rattling markets.
Saylor has dismissed the market’s concerns about potential Bitcoin sales as a “big nothing burger.” Even if Strategy sells some Bitcoin to pay dividends or repay debt, he says, it will still buy far more BTC than it sells.
Strategy is the largest corporate Bitcoin holder. Source: BitcoinTreasuries.net
Wall Street’s Take
Analysts are largely bullish on Strategy’s approach.
TD Cowen has called STRC an “anchor” for Strategy and a “premier digital credit instrument.” Benchmark has a more ambitious thesis. It says STRC could become a building block for Bitcoin-linked credit products, including yield-backed savings tokens or stablecoin-like instruments.
Not everyone is sold. Grayscale’s Zach Pandl has argued that instruments like STRC are directional bets on Bitcoin’s appreciation, with a risk profile resembling high-yield corporate debt.
Benchmark analysts are bullish on Strategy’s approach. Source: CoinMarketCap
What This Means for Markets
Ultimately, STRC is a test of whether Bitcoin can support a multibillion-dollar institutional-grade credit market.
If it works, other Bitcoin treasury companies may copy its structure. Then, income investors, wealth managers, or tokenized yield products could help turn it into a new class of Bitcoin-linked credit.
If it fails, the fallout could reach beyond Strategy, raising doubts about whether corporate Bitcoin treasuries can carry their financing costs through a full market cycle.
Saylor’s answer is characteristically confident. “Bitcoin is going up forever,” he told CNBC.
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