Strategy’s STRC preferred stock rebounded toward $88 after the company adopted a Digital Credit Capital Framework built around liquidity reserves, dividend policy, repurchase programs and possible Bitcoin monetization.
Market quotes showed STRC trading near $88, with an intraday high above $89, after the preferred stock had fallen sharply below its $100 stated amount during Bitcoin’s June selloff. Strategy’s objective is for STRC to trade over time near $99 to $100, although the company does not guarantee that range.
The rebound followed a direct change to the preferred stock’s payout profile. Strategy raised the annualized STRC dividend rate to 12% for semi-monthly periods with record dates on or after July 1, up from the earlier 11.5% transition rate. The company will keep evaluating the dividend rate monthly based on STRC trading levels, credit spreads, BTC price and volatility, reserve coverage, capital-market conditions and its broader capital structure.
STRC remains a preferred security rather than a Bitcoin-backed deposit or guaranteed yield product. Strategy’s STRC information page says the preferred stock pays 12% annual dividends in cash, payable semi-monthly, but also states that cash dividends are not guaranteed and the rate may be adjusted in future months.
Cash Reserve And Buybacks Target Credit Confidence
Strategy’s new framework starts with a $2.55 billion USD Reserve as of June 28. The reserve is restricted to preferred stock dividends and interest on outstanding indebtedness unless the board authorizes another use.
The reserve covers about 17.4 months of Strategy’s current expected annual preferred stock dividend payments and interest expense, which total about $1.76 billion. The board also set a minimum reserve policy equal to at least 12 months of those obligations, with any reduction below that level requiring board authorization.
Strategy also authorized up to $1 billion of repurchases for Digital Credit Securities, including STRC, STRF, STRD and STRK. STRC is expected to be the initial priority when management views repurchases as accretive and supportive of the capital structure. A separate $1 billion class A common stock repurchase program was also authorized.
That setup gives Strategy a new response when its securities trade at discounts. Repurchasing preferred shares below stated amount can reduce expected dividend obligations, while common stock buybacks can support equity value when management views MSTR as trading below intrinsic value. Strategy said neither repurchase program will use the USD Reserve.
The company had already been facing pressure around STRC’s discount, with Ripple CEO Brad Garlinghouse calling the STRC discount a negative signal for Strategy’s Bitcoin-backed financing structure. The new framework is designed to address that pressure with higher stated liquidity, a higher dividend rate and explicit buyback authority.
BTC Monetization Adds Flexibility To Treasury Model
Strategy also introduced a BTC Monetization Program that allows the company to sell Bitcoin for three defined purposes: adding up to $1.25 billion to the USD Reserve, funding or replenishing dividends and interest expense when management prefers BTC sales over equity issuance, and funding repurchases of Digital Credit Securities or MSTR common stock.
The authorization changes the capital-management playbook without forcing immediate Bitcoin sales. Strategy said the program has no fixed expiration date, can be modified or suspended, and does not obligate the company to sell BTC, fund dividends through BTC sales or repurchase securities.
The plan gives Strategy a path to use part of its Bitcoin reserve when issuing new common equity is unattractive. Michael Saylor had previously argued that Strategy could sell Bitcoin and still buy more BTC through a larger capital engine, but the June 29 framework makes potential BTC sales a formal part of treasury management.
The question for investors is whether Bitcoin appreciation, reserve coverage, capital markets and buybacks can keep STRC closer to par without creating pressure on Strategy’s long-term BTC position. Skeptics have focused on dividend sustainability, while supporters point to the larger cash reserve, buyback authority and Bitcoin rebound as signs that Strategy can manage the preferred-stock structure more actively.
Bitcoin traded near $60,695 at the latest market check, with an intraday range between $58,279 and $61,030. MSTR traded near $93.39, while external STRC quotes showed the preferred stock near $88 with an intraday high above $89.
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