Summary
- The preferred stock of Strategy (STRC) fell to a new low of $82.53, impacting its common shares.
- James Butterfill from CoinShares suggested that STRC's decline is likely due to uncertainty regarding Strategy's handling of fixed obligations.
- Mark Palmer from Benchmark-StoneX anticipates that Strategy will increase the dividend rate for STRC to help stabilize its price.
Strategy's preferred stock experienced significant downward pressure on Thursday, reaching an unprecedented low as the Bitcoin investment company reiterated its dedication to paying dividends to STRC shareholders.
As of now, STRC has decreased by 2.6% to $87.45, as reported by Yahoo Finance, reflecting a slight recovery from an earlier low of $82.53.
Since mid-May, the preferred stock has not traded at its par value of $100, with its performance showing cyclical tendencies, particularly following STRC's ex-dividend date.
This date marks the last day buyers of Strategy's preferred stock are eligible for the forthcoming distribution. The company is set to distribute approximately $100 million to investors at the end of the month alongside STRC's next payout.
“The ongoing weakness of STRC seems to be influenced less by Bitcoin itself and more by uncertainties regarding how Strategy plans to fund and handle its increasing fixed obligations,” stated James Butterfill, head of research at CoinShares, in an interview with Decrypt. “While a Bitcoin resurgence enhances the value of the assets backing Strategy, it does not necessarily increase the available cash.”
Last year, Strategy set up cash reserves to manage its debts and dividends, initially allocating $2.25 billion at the start of this year. However, after repurchasing some of its debt at a discount, this reserve has been revised to $1.1 billion.
STRC is designed to trade around its $100 par value, and when it remains below that level, Strategy has indicated that it can raise its dividend to stimulate demand. The dividend rate has remained steady at approximately 11.5% for the past four months.
Consequently, the weakness in STRC is seen as mechanical rather than indicative of distress, according to Mark Palmer, Managing Director and Senior Research Analyst at Benchmark-StoneX, who remarked to Decrypt that when the dividend rate is below the market clearing rate, the price is expected to decline.
“This is simply the structure functioning as intended,” he explained. “At the current price, we believe STRC presents investors with an appealing total return opportunity, combining a high current yield with a built-in mechanism to drive the price back toward par.”
Analysts at Benchmark-StoneX expect Strategy to raise the dividend at the beginning of July, which they believe will help push the price back toward par, Palmer added.
As STRC declined, the company’s common shares also fell. On Thursday, the stock price dropped to a low of $109.36, marking its lowest in four months. Over the past month, the equity has decreased by 32%, outpacing the decline in Bitcoin’s price.
The downturn intensified last month when the firm, based in Tysons Corner, Virginia, opted to sell 32 Bitcoin for $2.5 million. This move, previously announced, was intended to reinforce its commitment to paying the preferred stockholders.
“Prior to this, the prevailing narrative was that Strategy raised capital to acquire Bitcoin,” Butterfill observed. “Selling even a small amount to fulfill distributions disrupts that narrative and complicates the overall strategy, though only temporarily.”
The liquidation raised concerns about whether the largest corporate holder of Bitcoin could reduce its holdings in the future. On Wednesday, Strategy indicated in a post on X that its Bitcoin holdings could bolster confidence in STRC for many years ahead.
“We have 32 years of dividend coverage through our BTC Reserve,” the company stated, comparing its $55 billion in Bitcoin to $1.7 billion in annual dividends and interest obligations.
We have 32 years of dividend coverage through our $BTC Reserve. pic.twitter.com/qTvQYLweul
— Strategy (@Strategy) June 17, 2026
Udi Wertheimer, CEO of Taproot Wizards, remarked on X that if Strategy attempted to leverage its Bitcoin holdings, it would likely receive significantly less as the market absorbed the firm's supply.
On Thursday, Bitcoin fell below $62,500, reflecting a decrease of over 5% within a day, according to CoinGecko. At that price, the value of Strategy’s 846,842 BTC holdings was approximately $53 billion. However, analysts view the current pressure as indicative of growing pains rather than a critical flaw.
“I don’t see this as a dire situation at this point,” Butterfill noted. “It suggests that Strategy’s financing model has become less efficient and that investors are demanding a higher return for the associated risk.”