Strategy Preferred Stock STRC Plunge Triggers Leveraged Liquidations, Bitcoin Slide to $62K

Strategy (MSTR) launched perpetual preferred stock STRC last year, attracting capital with a $100 par value per share and an initial 9% yield. It raised a cumulative $10.5 billion to buy Bitcoin. The dividend yield later rose to 11.5%. Because this high-yield financing model helped make Strategy the largest corporate buyer, STRC's fall below par was seen as a critical stress test for the crypto market's leverage cycle.

Bitcoin fell to $58,190 on June 25, its lowest level in 21 months, while STRC dropped below $75 from its $100 par value. Strategy switched to floating pricing on June 29 and may sell Bitcoin to fund dividends if necessary. Bitwise Chief Investment Officer Matt Hougan said on July 1 that Strategy was not nearing liquidation, citing $52 billion in liquid assets and $7 billion in debt. He said the deleveraging indicated the cycle was nearing a bottom and that institutions would take over as the main source of buying.

MicroStrategy, now known as Strategy, has raised funds by issuing STRC perpetual preferred stock and used the proceeds to add to its Bitcoin holdings. Investors have relied primarily on dividends and the shares’ $100 par value to underpin confidence. When Bitcoin fell to about $73,000, STRC dropped below $99, raising concerns about whether the company could continue raising capital, paying dividends and maintaining its Bitcoin treasury strategy.

As of July 19, 2026, STRC had extended its decline from below $99 to $75. It had also traded at $88–$89 during the period, while its annualized dividend yield rose to about 11.5%. Strategy’s latest cash reserves were estimated to cover about 10 months of dividends, up from roughly six months previously, but the widening discount showed that retail investor confidence continued to weaken.

Strategy launched STRC, a floating-rate perpetual preferred stock, in July 2025 with a par value of $100 to raise funds for expanding its Bitcoin holdings. Its dividend rate is adjusted monthly to keep the market price close to par. Although STRC ranks ahead of common stock for repayment, it remains exposed to risks tied to Strategy’s Bitcoin holdings, financing and dividend coverage. Its sharp discount to par is now testing its positioning as a stable income investment.

STRC closed at $91.79 on June 16, 2026, an 8.2% discount to its $100 par value and its third-lowest close since listing in July 2025, implying an annualized yield of 12.53%. Bitcoin was trading at about $65,000 at the time. After Strategy repaid $1.5 billion of convertible debt, its cash dividend coverage fell from 24 months to seven months. The same day, Strive’s SATA began paying daily dividends at a 13% annual rate while trading at $99.99, further drawing income-focused capital away from STRC.

Strategy, formerly MicroStrategy, has raised funds since 2020 by issuing MSTR common stock, convertible bonds and preferred shares such as STRC to buy Bitcoin. This created a cycle in which rising Bitcoin prices enabled further capital raising and additional purchases. STRC has a $100 reference price and pays cash dividends. When Bitcoin, MSTR and STRC all decline, the company's financing capacity deteriorates as dividend pressure and shareholder dilution risks increase.

Strategy's U.S. dollar reserves fell from $2.25 billion in February to $871 million in May, while STRC dropped to $71.25 on June 26. The company raised STRC's annualized dividend rate for July from 11.5% to 12%, bringing annual dividend payments to about $1.025 billion. It also sold 3,588 Bitcoin from June 29 to July 5, raising about $216 million to replenish its cash reserves.

Strategy, formerly MicroStrategy, launched STRC, a variable-dividend preferred stock, in late July 2025. The company adjusts its dividend rate in an effort to keep the shares near their $100 par value and uses most of the proceeds to buy more bitcoin. The instrument is central to Michael Saylor's bitcoin-treasury “flywheel.” If STRC remains below par for an extended period, it could weaken Strategy's ability to raise capital and purchase bitcoin.

On June 18, 2026, STRC fell to an intraday record low of $82.53 and closed at $88.59, a discount of more than 11% to its $100 par value. Bitcoin had fallen nearly 50% since STRC's launch, while the preferred stock's effective yield climbed above 12.9%. Peter Schiff criticized the model as tantamount to a Ponzi scheme, while Jesse Myers of The Smarter Web Company attributed the decline to short-term selling caused by leveraged liquidations.

Bitcoin came under pressure ahead of Federal Reserve Chair Kevin Warsh’s first interest-rate decision, with markets watching whether high interest rates and corporate buying can continue to provide support. Bitfinex said the rebound was driven mainly by seller exhaustion rather than fresh capital inflows, making the financing capacity of Strategy, formerly MicroStrategy and the largest corporate bitcoin holder, a key factor for the price.

Bitcoin fell to a week-to-date low of $64,500 on June 17, breaking below the $65,000 threshold. It had previously rebounded 13.5% from a June 5 low of $59,200. Strategy’s STRC preferred stock closed at a record low of $91.79 on June 16, more than 8% below its $100 face value. Bitfinex warned that bitcoin could fall to $54,000 if it breaks below $60,000 and the previous low of $59,200.

Strategy, formerly known as MicroStrategy, is a key bellwether for corporate crypto treasury strategies, raising funds through common and preferred stock offerings to acquire Bitcoin. STRC is a preferred stock that pays monthly dividends. Changes to its dividend affect investor returns and reflect the company’s financing costs and capital needs amid Bitcoin volatility.

Strategy raised STRC’s annualized dividend rate by 25 basis points to 11.5% in March 2026 and has now kept it at that level for a fourth consecutive month. Meanwhile, Bitcoin fell 20% in February, dragging MSTR down 14% for the month and marking its eighth consecutive monthly decline, underscoring the divergence between preferred-stock yields and the risk profile of the common shares.