Key Takeaways: Strategy's STRC perpetual preferred stock has seen its 90-day correlation with bitcoin climb to nearly 0.70, the highest since its July 2025 debut. STRC has fallen 23% this month to $76, while bitcoin has dropped nearly 20% to below $60,000. The tightening correlation undermines STRC's appeal as a relatively steadier income vehicle tied to Strategy's bitcoin holdings.
Strategy Inc.'s perpetual preferred stock, STRC, has seen its 90-day correlation with bitcoin climb to nearly 0.70, the highest level since the instrument debuted in July 2025, according to TradingView data. The tightening link undermines STRC's appeal as a relatively steadier income vehicle and raises questions about the sustainability of Michael Saylor's digital credit model.
"STRC was designed as a hybrid product that would trade near its $100 par value and provide yield-focused investors with a degree of decoupling from bitcoin's volatility," said Nina Volkov, a crypto macro analyst. "A 0.70 correlation means that decoupling has largely evaporated."
STRC has dropped 23% this month to $76 as of Thursday, while bitcoin has fallen nearly 20% to under $60,000, hitting levels last seen in October 2024. The preferred stock's slide accelerated this week, with STRC touching a record low of $74.13 on Thursday — more than 25% below its $100 par value. Strategy holds 847,363 BTC worth about $50.4 billion, according to BitcoinTreasuries.net, making it the largest corporate bitcoin holder globally.
The rising correlation changes the risk calculus for investors who bought STRC for its 11.5% annualized dividend yield. When STRC trades above par, Strategy can issue additional shares through at-the-market offerings and use the proceeds to buy more bitcoin — a positive feedback loop that has fueled aggressive accumulation. But with STRC trading well below $100, that funding mechanism is effectively shut. The company recently sold 32 bitcoin for $2.5 million to cover dividend obligations, marking its first sale since 2022 and a sharp departure from its long-standing "never sell" stance.
The Doom Loop Risk
The stress on STRC is cascading through Strategy's capital structure. The company's common stock, MSTR, has fallen 46% over the past month to around $87, down from a 52-week high of $457.22. Strategy carries long-term debt above $8 billion and faces perpetual preferred dividend obligations of roughly $229.5 million per quarter.
Analysts at JPMorgan and CryptoQuant have warned that Strategy needs to rebuild its cash reserves to maintain confidence in STRC. The company's USD Reserve — the cash cushion for managing dividend payments and debt — has shrunk from covering seven years of dividends in January to about 14 months at current levels, according to recent disclosures. Strategy has taken steps to rebuild its cash stockpile to $1.4 billion by issuing common shares, but that has diluted the company's core metric of bitcoin owned per share.
Polymarket assigns only a 6% probability of a Strategy margin call in 2026, suggesting the market does not see existential risk yet. However, traders price a 43% probability of an MSCI index delisting by year-end, reflecting concerns about the company's shrinking market capitalization and deteriorating financial profile.
What Comes Next
Market observers are divided on STRC's outlook. Some see the current discount as an attractive entry for yield-focused capital that could snap back toward par in a recovery, delivering both income and capital appreciation. Others worry that sustained weakness could strain the capital structure further, increase reliance on existing reserves, or force additional bitcoin sales.
For now, STRC's fate remains tied to bitcoin's direction. If the cryptocurrency stabilizes above $59,000 and recovers, STRC could reclaim ground toward par. If bitcoin continues to slide, the pressure on Strategy's capital structure — and on STRC's value proposition — will only intensify.
This article is for informational purposes only and does not constitute investment advice.
