Summary
- Strive's CEO Matt Cole described Thursday as the "most challenging day ever" for digital credit products.
- Both Strive's SATA and Strategy's STRC fell significantly below their intended par values, likely due to leveraged position unwinding.
- These assets, which are meant to trade around $100, ended the day at $97.71 and $88.59, respectively.
On Thursday, digital credit preferred shares from Bitcoin treasury firms experienced their worst performance ever, as noted by Strive CEO Matt Cole. He attributed the sharp declines in prices to leveraged positions, while asserting the underlying credit quality remains strong.
Cole's remarks came after both SATA and STRC, preferred equity and digital credit offerings from his company and Bitcoin treasury leader Strategy, fell significantly below their designated par values.
“Today marked the toughest day in the history of digital credit,” Cole stated on X. “What occurred was a leverage liquidation event rather than a decline in the quality of the underlying credit.”
Cole explained that when investors encounter attractive yield opportunities with low volatility, they often amplify their investments through borrowing.
Today was the most difficult day in the history of Digital Credit.$STRC hit a low of $82.50 before making a recovery. $SATA dropped from par into the low 90s but also rebounded. It was a challenging day for many investors.
What happened today was a leverage…
— Matt Cole (@ColeMacro) June 18, 2026
“Many investors eventually feel that merely owning the asset is insufficient. They borrow against it and leverage it,” he noted. “This strategy works until it doesn’t.”
Thursday saw significant trading volumes for both SATA and STRC, marking their second and fourth largest trading days, with $153 million and $941 million traded, respectively, as reported by Strive’s Chief Risk Officer Jeff Walton.
Walton pointed out that these volumes, especially when compared to the much lower trading volumes of larger preferred equity options like JPMorgan’s JPM.PD and Blackrock’s PFF, make a leverage unwind more probable.
“Leverage seems to have been eliminated, with fundamentals remaining intact, and the instruments managed the flow and found buyers throughout the day,” he posted on X.
In response to an inquiry on X about where SATA’s leverage was focused, Walton stated that Strive is “aware of a few anecdotal sources” and is conducting a “more thorough postmortem review” that they will share later.
Both SATA and STRC are intended to trade around $100 per share, but during Thursday’s session, SATA dropped to as low as $92.88 while STRC fell further to a low of $82.53 before closing at $88.59.
While it is common for STRC to trade below its par value following its dividend date, analysts indicated to Decrypt that concerns over how the firm plans to fulfill its dividend payments are contributing to “ongoing weakness.”
The digital credit products are designed to assist Strive and Strategy in raising funds for Bitcoin purchases, attracting more everyday investors seeking dividends and less volatility compared to the company's common stocks or direct Bitcoin exposure.
However, uncertainty regarding how dividend obligations will be addressed has raised doubts about the financial engineering of these products. Last month, Strategy sold 32 BTC for $2.5 million, demonstrating that the firm could diverge from its “never sell” strategy if necessary.
Despite bolstering its cash reserves and maintaining a strong narrative about its capacity to meet obligations, Strategy’s common shares and preferred equity continue to underperform.
As of Thursday’s market close, MSTR saw a further decline of 3.46% to $112.53, now down over 32% in the past month. Strive's shares (ASST) fell by 3.8% to $14.85, marking nearly a 6% loss for the month. U.S. markets will be closed on Friday for the Juneteenth federal holiday.
A spokesperson for Strive did not provide an immediate response to Decrypt's request for comment.