Strategy's STRC gains 9% as Bitcoin falls 47% in a year

Strategy's STRC preferred stock gained 9% over the past year while Bitcoin fell 47%, according to a performance chart Michael Saylor published Sunday. The comparison runs from Aug. 14, 2025, through Aug. 14, 2026, measuring four Strategy credit instruments against the single asset backing the company's entire treasury.

"Financial engineering can transform volatile Digital Capital into instruments designed for income, stability, and reduced downside risk," Saylor, executive chairman of Strategy, said in a post on X.

STRC, formally the Variable Rate Series A Perpetual Stretch Preferred Stock, pays 12 percent annually in twice-monthly cash dividends. The company adjusts the rate to hold STRC near its $100 par value. The other three instruments lagged: STRD fell 8 percent, STRF lost 9 percent, and STRK dropped 27 percent. STRK converts into 0.1 shares of MSTR per share, explaining its closer tracking of the common stock. None of the four carry a claim on Strategy's Bitcoin holdings.

The chart omits MSTR, Strategy's common stock, which closed at $93.04 on Aug. 14 — roughly 75 percent below its level a year earlier, according to Yahoo Finance data. The stock touched $367.57 at its 52-week high. Common shareholders absorbed the leverage while preferred holders collected income.

The Missing Number: MSTR's 75% Collapse

The omission matters because MSTR's decline dwarfs every other metric in Saylor's chart. Bitcoin traded near $63,072 on Sunday, still deep inside a bear market that began last autumn. The cryptocurrency has fallen roughly 50 percent from its October 2026 peak near $126,080, according to market data. Key support sits at $61,126 with resistance at $63,517, per technical analysis.

Demand signals remain weak. The Coinbase Bitcoin Premium Index has stayed negative for 90 consecutive days, indicating weaker U.S. buying pressure on Coinbase compared with Binance, according to market data. Long-term holders face significant unrealized losses, though analytical models from VanEck suggest early signs of a possible bottom.

Strategy has also flipped into a net seller of Bitcoin. The company added 37 coins across two months, then sold 1,638 in a single week. Its treasury now sits at a lower level than it did in May. In August, Strategy sold 1,690 Bitcoin to fund STRC share buybacks after the security slipped under par. The buyback program was designed to support the preferred stock's price near its $100 par value.

Can the Payout Load Hold?

Critics question how long the company can carry its dividend obligations. Arca Chief Investment Officer Jeff Dorman warned in May that a $15 billion preferred stack strains the Bitcoin flywheel. The concern is straightforward: if Bitcoin keeps falling, Strategy must either sell more coins to fund buybacks and dividends or cut payouts, which would pressure preferred prices.

Saylor addressed credit risk head-on last week. His new model publishes floor prices for creditors, naming the Bitcoin levels where each security breaks. The engineering worked as advertised for 12 months, turning one volatile asset into four calmer income streams. Whether those streams hold through a second year of falling Bitcoin prices is the question facing holders now.

This article is for informational purposes only and does not constitute investment advice.