STRC drops below peg, raising funding concerns
Strategy’s preferred stock STRC fell sharply this week, dropping more than 11% below its intended $100 face value and casting doubt on the durability of the company’s financing model. U.S. equity market data showed the shares hit an intraday low of $83.26 before closing at $88.59, marking a significant deviation from the peg that underpins its capital-raising strategy.
The decline directly pressures Strategy’s ability to fund its expanding Bitcoin reserve program. The company relies on keeping STRC near $100 to issue shares through at-the-market offerings. When the stock trades below par, issuing new shares becomes inefficient, limiting access to liquidity without diluting common shareholders.
Dividend changes fail to stabilize price
Launched in 2025, STRC was structured as a perpetual preferred share with a fixed face value and stable dividend payouts, allowing Strategy to raise capital without traditional debt or equity dilution. The proceeds have been used primarily to accumulate Bitcoin.
In response to the recent slide, the company increased STRC’s dividend yield to 11.5% and shifted payouts from monthly to twice monthly. The adjustments, however, have not been enough to restore the stock to its target level, suggesting that higher yield alone cannot rebalance supply and demand.
Market analysts point to deleveraging among leveraged accounts as a key driver of the drop. Positions that exploited small price differences around the peg were unwound, triggering forced selling that amplified the decline beyond typical volatility.
Liquidity questions come into focus
The price weakness has also intensified scrutiny of Strategy’s liquidity. A JPMorgan report estimated the company’s cash reserves cover roughly 6.3 months of STRC dividend payments. Management has countered that, when including Bitcoin holdings, it could sustain payouts for decades.
That assumption hinges on the ability to convert Bitcoin into cash if needed. Earlier this month, Strategy sold 32 Bitcoin in what it described as a “market sensitivity test.” The move unsettled parts of the market, where the company’s Bitcoin holdings had long been viewed as a strategic reserve rather than a liquid funding source.
The sale has fueled speculation that further disposals could follow if equity-based financing remains constrained. Continued underpricing of STRC may force Strategy to rely more heavily on selling reserve assets to meet obligations.
Potential shift in Bitcoin market dynamics
Any transition from consistent accumulation to periodic selling would mark a structural shift. Strategy has been a steady source of demand for Bitcoin in recent years. A reversal could introduce a new stream of supply into the market, altering the balance that has supported prices.
This concern comes as Bitcoin trades in a volatile range between $60,000 and $70,000. The asset recently dipped below $64,000 following a more hawkish policy outlook from the Federal Reserve, dampening sentiment toward risk-sensitive assets.
At the same time, U.S.-listed spot Bitcoin ETFs have recorded sustained outflows, including $82.17 million on June 17. मई also saw the largest monthly outflow of 2026, totaling $2.30 billion, signaling cooling demand from large-scale market participants.
What traders are watching next
Attention is now turning to how Strategy manages its reserves and whether additional Bitcoin sales emerge. Key signals include company disclosures, on-chain wallet activity linked to corporate holdings, and patterns in exchange order books that could indicate systematic selling.
The market’s ability to absorb any sustained increase in supply without significant price deterioration will be closely watched, as it may define the next phase of Bitcoin’s price trajectory.
Worried about STRC’s dilution risk and Bitcoin reliance? Learn how tokenized equities can reshape corporate funding and investor exposure.
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