Strategy’s STRC preferred stock extended its slide to a fresh record low on Thursday, deepening the discount on one of the main channels the largest corporate bitcoin holder uses to fund its purchases.

The Variable Rate Series A Perpetual Stretch Preferred Stock, known as STRC, traded near $85 on Thursday afternoon and touched an intraday low of $84.45, a 52-week low, according to Cboe real-time data around 3:15 p.m. in New York.

The level sits about 15% below the $100 stated amount the stock is designed to hold, and below its $90 IPO price. STRC carries a declared dividend rate of 11.50% a year; at Thursday’s price, that lifts the effective yield to roughly 13.5%. The move extends a record-low close of $89 on Wednesday, a roughly 3% single-day drop on volume of about 5 million shares.

Strategy, the world’s largest corporate holder of bitcoin with about 846,842 BTC, sells STRC near or above its stated amount and routes the proceeds into bitcoin. As the discount grows, that channel raises less cash per share. The record low lands two weeks after Strategy sold bitcoin for the first time since 2022 to fund preferred dividends, and as bitcoin trades around $63,900, below the roughly $75,656 average price Strategy paid for its stack.

How STRC Funds Bitcoin Buys

STRC is a perpetual preferred stock, a class of equity that pays a dividend and ranks ahead of common shares in the payout order. Strategy designed STRC to trade with low volatility near $100 by adjusting its dividend rate each month, marketing it as a higher-yield, lower-volatility way to gain exposure to its bitcoin treasury without holding the common stock.

Strategy raises cash by selling new STRC shares through an at-the-market, or ATM, program. The company launched the program at $4.2 billion in July 2025 alongside what was then its largest-ever IPO, and has since expanded it. In an 8-K covering the week ended June 7, Strategy reported zero STRC ATM sales and about $17.51 billion of remaining STRC issuance capacity. The mechanism depends on the stock holding near or above its stated amount; selling well below $100 raises less cash per share and works against the price-stability design.

STRC has also shrunk as a piece of Strategy’s capital structure as it has fallen. The company told shareholders that as of mid-April STRC carried a $6.4 billion market value with 1.7% 30-day historical volatility; its market value had fallen to about $4.3 billion by Thursday afternoon.

The Dividend Math

The pressure on STRC comes alongside a recurring cash obligation. STRC pays its dividend in cash, and Strategy declared a per-share dividend of about $0.958 for the month ending June 30, reflecting the 11.50% annual rate it held steady effective June 1. The dividend currently pays monthly, but Strategy will move to two scheduled payment dates per month starting June 30, under an amended certificate of designations approved at its June 8 annual meeting.

To meet those obligations, Strategy disclosed on June 1 that it sold 32 bitcoin between May 26 and May 31 at an average price of $77,135, for about $2.5 million, stating the proceeds were expected to fund preferred dividends. The sale was small against a bitcoin position worth more than $50 billion, but it marked the company’s first bitcoin sale since 2022 and the first it disclosed in a standalone filing, a shift for a firm that had framed itself as a net accumulator.

Strategy has also been rebuilding a dedicated cash buffer. The company reported that its USD Reserve, a management-designated pool of liquidity established in December 2025 to support preferred dividends and debt interest, stood at $1.1 billion as of June 14, including unsettled ATM proceeds. That is down from the $2.25 billion Strategy said the reserve held at the start of the year. Over the same week, Strategy bought 1,587 bitcoin for about $100 million using proceeds from common stock sales, separate from the STRC channel.

A Macro Headwind

The decline tracks broad weakness in bitcoin and in Strategy’s other securities. Bitcoin traded around $63,900 on Thursday, down about 1% on the day. The common stock, MSTR, slid about 5% on Wednesday to roughly $116.50, a steeper fall than bitcoin’s, and trades far below its 52-week high near $457.

The selling followed the Federal Reserve’s June 17 decision, the first chaired by Kevin Warsh, to hold its benchmark rate at 3.50% to 3.75% in a unanimous vote. The accompanying projections turned hawkish: nine of 18 officials now see at least one rate increase in 2026, a reversal from March, and the Fed raised its year-end inflation forecast. Higher-for-longer rates weigh on both bitcoin and the income-oriented buyers STRC targets, who can find competing yield in money-market funds and Treasuries.

Saylor Defends the Design

A weaker STRC does not by itself break Strategy’s model, and the company and several analysts have pushed back on the most bearish reading. Bitcoin critic Peter Schiff has revived his “death spiral” argument, contending that the structure forces Strategy to choose between supporting STRC’s price and diluting common shareholders. Analysts at Benchmark and TD Cowen have disputed that framing.

Saylor has defended the design, arguing in recent interviews that Strategy’s bitcoin only needs to appreciate at a low single-digit annual rate for its holdings to cover STRC dividends indefinitely without selling common stock, and saying the company aims to buy far more bitcoin than it sells. He has described Strategy as a shock absorber for bitcoin rather than a systemic risk. The company’s leadership has described the variable-rate mechanism as a tool that has helped keep STRC near its stated amount through earlier stretches of bitcoin weakness.

There is also a counter-signal in a competing product. SATA, the preferred stock Strive created to mirror STRC, traded above $99 this week, suggesting the selloff reflects confidence in Strategy specifically rather than a flaw in the instrument’s design alone. By rank, STRC sits senior to Strategy’s STRK and STRD preferreds and to its common stock, but junior to its STRF preferred and to its debt, giving its dividend a defined claim on the balance sheet.

What’s Next

The semi-monthly dividend switch takes effect June 30, a change Strategy has said is meant to smooth STRC’s trading and reduce volatility around ex-dividend dates. Investors will watch whether the stock stabilizes near $100, whether Strategy resumes STRC issuance once it trades closer to par, and whether further bitcoin sales follow to cover distributions. Strategy is expected to file its next weekly capital-markets update in the coming days.