Timeline of STRC Falling Below $100: Strategy’s Bitcoin Capital Model Faces a Stress Test

Odaily reports that STRC, the dividend-paying preferred stock issued by bitcoin treasury company Strategy (MSTR), recently fell below its $100 par value, drawing market attention to its high-yield dividend model, cash reserves, and bitcoin asset strategy. STRC was originally designed as a high-yield, low-volatility preferred stock pegged at a $100 par value, attracting investors through continuous dividends and helping Strategy finance dividend payments via ATM (at-the-market) offerings. However, the recent decline in bitcoin prices, coupled with a series of the company's capital operations, has caused STRC's price to deviate significantly from its target level. The timeline of this decline event is as follows:

May 14: STRC closed at $100 before its ex-dividend date, with bitcoin prices still above $80,000. However, market pressure had already begun to emerge; competing product SATA announced a daily dividend mechanism offering a 13% yield, increasing competitive pressure on STRC.

May 15: Strategy announced it would repurchase $1.5 billion of its 2029 convertible bonds at approximately an 8% discount. The market subsequently noted that the company’s dollar reserves, previously set up to support dividend and debt payments, were used in this transaction.

May 26: Strategy confirmed that cash reserves were involved in the bond repurchase, with the relevant fund size reduced to approximately $871 million, equating to about six months of STRC dividend coverage ability, whereas the company had previously aimed to maintain approximately 24 months of coverage.

June 1: Strategy sold bitcoin for the first time since 2022, selling 32 BTC to demonstrate its ability to support dividends by selling assets. Following the announcement, MSTR’s stock price dropped by 5.9%.

June 5: Bitcoin fell below $60,000, and STRC dropped to around $90, closing at $93.40.

June 8: Strategy shareholders approved a change in STRC’s dividend frequency, switching from once a month to twice a month. The company also stated that its dollar reserves had rebounded to $1 billion.

June 15: Strategy purchased an additional 1,587 BTC, raising its dollar reserves to $1.1 billion.

June 18: STRC fell below $83 during trading, approximately 17% below its $100 target price, hitting a new low since its listing in July 2025, and eventually closed at $88.59.

Currently, Strategy holds approximately 846,842 BTC with an average cost of about $75,656. Based on bitcoin’s price of roughly $62,500, the company’s unrealized paper loss amounts to approximately $11.14 billion.

Meanwhile, the market is also beginning to focus on the potential dilution pressure from Strategy’s recent fundraising activities. MSTR’s current price is about $112, down approximately 80% from its all-time high in November 2024.

Analysts believe that the core challenge facing STRC lies in its financial structure being highly correlated with bitcoin prices: when BTC enters an adjustment cycle, the market not only reassesses bitcoin itself but also begins to re-evaluate the preferred stock, debt, and financing systems built around it. (CoinDesk)

The current market focus is on whether STRC can return to its $100 par value and whether Strategy’s bitcoin capital model can continue to be sustained.