Bitcoin has continued to slide over the months since Strategy’s bitcoin-funding vehicle, Strategy’s preferred equity unit “Stretch” (STRC), launched in late July 2025. The move has put fresh scrutiny on how STRC’s structure is performing—and, more importantly, what happens when its market price drifts far below the $100 “liquidation preference” around which the instrument was designed to operate.
STRC has recently traded at a persistent discount. On Thursday, the unit reportedly fell to a record low of $82.53 and closed at $88.59—well below the $100 par level. That gap has reignited calls from prominent critics, even as other analysts argue the drawdown reflects leverage dynamics rather than a fundamental collapse.
Key takeaways
- STRC closed at $88.59 on Thursday after hitting a record low of $82.53, keeping the unit well below its $100 par level.
- Critics, including Peter Schiff, characterize STRC’s discount as evidence of a “centralized Ponzi,” though Strategy has not directly addressed those claims in recent statements.
- Some analysts say the selloff is better explained by a leverage wipeout and forced selling after STRC slipped under key thresholds.
- The discount and rising “effective yield” appear to have coincided with slower STRC-fueled bitcoin buying compared with earlier in 2026.
- Strategy adjusted STRC’s dividend schedule toward a semi-monthly cadence, a change observers say may affect funding expectations.
Why STRC trading below par matters
STRC was structured to trade close to its $100 par value, with adjustable dividends designed to attract capital and channel proceeds primarily toward buying Bitcoin. As long as the market price stays near that $100 level, the vehicle’s dividend mechanics and investor expectations remain aligned with Strategy’s bitcoin-accumulation plan.
But the recent widening discount changes the picture. The instrument’s drop below par implies that the “BTC buying channel” is under pressure—at least from a pricing and financing-efficiency standpoint—because the vehicle may need more market demand, better terms, or additional flexibility to keep fundraising smooth.
At an annualized dividend rate currently cited at 11.5%, multiple analysts note that a lower entry price boosts the effective yield to above 12.9% as STRC trades deeper into the discount. That higher yield can attract income-oriented buyers, yet critics argue that elevated yields can also mask underlying financing stress when the market price continues to drift.
Ponzi accusations vs. leverage-wipeout explanations
Bitcoin critic Peter Schiff has repeatedly described STRC as “a classic centralized Ponzi,” arguing that the model depends on Strategy’s ability to keep raising fresh capital through continued issuance or to sell Bitcoin in order to meet obligations. The concern, in Schiff’s framing, is that the structure cannot rely indefinitely on ongoing market confidence when the instrument’s price moves away from par.
Others have echoed the theme more directly by pointing to STRC’s behavior after it moved below par. Crypto trader DonAlt, for example, questioned why STRC was “trading like a Ponzi” after the sharp drop.
Strategy has not directly addressed these characterizations in recent commentary, continuing to present STRC as preferred equity backed by Strategy’s bitcoin-focused treasury strategy. Still, one tangible operational adjustment is worth noting: Strategy has shifted STRC to a semi-monthly dividend schedule, with payouts designed to occur twice a month rather than monthly. Earlier coverage from Cointelegraph described this dividend-vote and payout structure adjustment as part of how Strategy frames STRC’s mechanics in practice (see Cointelegraph report).
On the other side of the debate, analyst Jesse Myers, head of Bitcoin strategy at The Smarter Web Company, argued in a Thursday post that “Strategy is fine.” Myers’ claim is that STRC’s slide resembles a leverage wipeout more than a deterioration in Strategy’s core fundamentals. In his view, investors used heavy leverage while STRC hovered near the $99–$100 range, assuming it would remain above levels such as $95; once the price slipped, margin calls and forced selling accelerated the decline (Myers’ post on X).
Other income-market analysts have also pointed to how the dividend math works. Scott Melker, in a Sunday post, highlighted that STRC’s dividends are tied to the $100 liquidation preference rather than the instrument’s market price. In that framing, a buyer entering at $90 would earn roughly 12.8% at an 11.5% dividend rate, while a buyer entering at $85 could earn about 13.5%—a setup that can broaden the appeal of discounted “par-linked” products (Melker’s post on X).
Bitcoin accumulation slows as STRC funding efficiency weakens
As STRC trades below par, the timeline of Strategy’s bitcoin purchases suggests a slowdown in the pace of accumulation. Cointelegraph previously reported that Strategy added 1,550 BTC for $101 million in the week ending June 8, followed by another 1,587 BTC for $100 million in the week ending June 15, bringing total holdings to 846,842 BTC (Week ending June 8 and Week ending June 15).
Those amounts are meaningful, but Cointelegraph’s earlier reporting shows they are far smaller than Strategy’s earlier weekly buying pace during 2026. For example, in April, Strategy reportedly bought 34,164 BTC for $2.54 billion in a single week, and in May added 24,869 BTC for roughly $2.01 billion (April report and May report).
In June, the weekly additions appear closer to roughly $100 million rather than multi-billion weeks—matching the broader sense that STRC-led capital raising is becoming less efficient when the vehicle trades at a persistent discount.
Cointelegraph also noted a small BTC sale of 32 BTC earlier in June, worth about $2.5 million, to help cover dividend obligations. While the sale is tiny relative to Strategy’s overall treasury, it serves as a reminder that cash obligations can still force limited Bitcoin liquidation when the financing channel weakens.
The practical implication for investors is straightforward: when STRC is trading at a larger discount, the pipeline that supplies capital to buy more BTC can slow, and Strategy may need to rely more on other funding levers, operational flexibility, or direct sales to manage timing mismatches.
What to watch: dividends, issuance, and the next funding cycle
The widening discount has also been linked to a pause in at-the-market share issuance, according to the reporting. In business terms, Strategy’s “flywheel” depends on continuous reinforcement between capital raising and Bitcoin buying: proceeds help expand holdings, which supports the broader confidence narrative and (in turn) helps keep funding flowing. If STRC’s discount continues to widen, that flywheel may lose momentum.
Analysts suggest that STRC’s effective yield could keep attracting income investors as long as dividends remain connected to the $100 liquidation preference. That said, the market may still treat par-linked products differently once they trade persistently below par—especially if leverage traders unwind, margin calls accelerate selling, and new issuance becomes more difficult.
Strategy may announce its next dividend rate on June 30, while retaining other potential funding options, including MSTR share issuance and cash reserves, to support ongoing Bitcoin purchases. The key question is whether the semi-monthly dividend schedule and the next dividend decision help stabilize expectations—or whether the discount continues to force deleveraging.
For traders and long-term observers, the next catalysts are likely to be STRC’s dividend-rate guidance and the trajectory of the instrument’s discount to $100 par—because those two factors together may determine how quickly Strategy can regain a faster BTC accumulation pace.
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