Strategy's STRC Attracts Bearish Bets After a New All-time Low

Strategy’s preferred stock STRC hit $88.51 on Wednesday, its lowest level since the listing, before closing at $89. This 11% discount to the par value of $100 comes with a higher volume of put options than call options on contracts expiring June 18. Will Michael Saylor’s main bitcoin financing vehicle withstand market pressure? 

Why is STRC collapsing so fast?

STRC was structured to stay around $100 through monthly dividend adjustments. However, the stock has fallen nearly 10.7% since the start of the year, a signal that investors now demand a higher yield to hold the share.

The June 18 options data reveals a net bearish concentration. Open interest on puts reaches 1,912 contracts at a strike price of $60 and 1,230 contracts at $80. Net gamma exposure stands at -$1.1 million per 1% move, which can mechanically amplify declines if market makers adjust their hedges.

Andre Dragosch, head of research at Bitwise Europe, estimates that an annual dividend near $13 would be necessary to bring STRC back to par value under current rate conditions. However, increasing this dividend raises Strategy’s cash obligations without guaranteeing to restart the share issuance process.

Does Strategy’s capital structure withstand scrutiny?

Strategy holds 846,842 bitcoins, valued around $54.2 billion. Last November, it announced 71 years of dividend coverage. Since then, bitcoin has lost a significant portion of its value relative to this calculation, and the estimated horizon has mechanically contracted.

The market no longer only looks at asset value. It scrutinizes their liquidity. Preferred dividends are paid in cash, not BTC. JA Maartunn, analyst at CryptoQuant, warns that any bitcoin sale to finance these payments would pressure the BTC price, thereby reducing the reserves’ value in a downward spiral logic.

Quinn Thompson, chief investment officer of Lekker Capital, emphasizes that the weakness goes beyond STRC alone. It’s the company’s overall financing model that investors are reevaluating. Strategy however continued its purchases in early June, investing $100 million for 1,587 BTC, funded via MSTR stock sales. Saylor remains loyal to his model, even under constraint.

In short, the STRC retreat reflects three simultaneous tensions: rates making the stock less attractive versus bonds, doubts about the real liquidity of Strategy’s bitcoin reserves, and a market questioning the sustainability of Saylor’s model. For STRC to regain $100, either a raised dividend, a rate easing, or a significant bitcoin rebound would be necessary. The window is closing.