- Bitcoin weakness pushed STRC below $100 as Strategy’s funding pressure increased sharply.
- Strategy’s STRC dividend burden reached about $1.21 billion in annual cash costs today.
- Bitcoin sales to cover STRC payouts could challenge Strategy’s long-held position.
Bitcoin weakness has placed Strategy’s STRC product under renewed pressure after the preferred stock dropped far below its intended $100 level. Analyst Bull Theory said the fall showed the exact strain that could eventually push the company toward Bitcoin sales.
In an X post, Bull Theory said Strategy may be facing its hardest funding pressure so far. STRC recently fell to $82.53. That marked a drop of more than 17% from the $100 level it was designed to hold.
Bitcoin Drop Tests Strategy’s STRC Model
According to analysts, Saylor has said he designed it with ChatGPT. He also said the AI described it as a finance instrument that had not been built before. For months, the product traded close to $100. It also paid an 11.5% annual dividend. The pressure increased as Bitcoin fell near $62,000, down more than 5% for the week.
Strategy holds 846,842 Bitcoin, worth about $53 billion at current prices. Bull Theory said confidence in STRC has weakened as the asset-backing Strategy’s model declined.
The dividend creates a large cash burden for the company. Strategy has about 104.9 million STRC shares outstanding. At $11.50 per share each year, the annual obligation is about $1.21 billion. The payout is made in cash every 15 days. That makes the product costly when its price falls below par. Strategy has now paused its STRC fundraising program.
Analyst said the math explains the pause. If Strategy raised $500 million at the $100 par value, it would need to issue 5 million new shares. At $87, the same raise would require about 5.75 million shares.
This would create 750,000 extra shares for the same amount of cash. Each share would still carry the full $11.50 dividend obligation. The analyst said selling below par increases future cash costs for the same capital raised. However, Strategy sold 32 Bitcoins for $2.5 million to cover STRC dividend payments. Analysts said it was the company’s first such sale since 2022.
STRC Dividend Burden Raises Funding Concerns
According to analyst, covering the full $1.21 billion annual STRC obligation at $62,000 per Bitcoin would require about 19,516 coins a year. That is more than 600 times the 32 coins sold in May.
However, analyst said the issue is not the size of one sale. It is the shift from an isolated decision to a recurring funding pattern.
The dividend rate has already increased from 9% to 11.5%. Every 0.5% increase on 104.9 million shares adds about $52.45 million in yearly costs.
Bull Theory said Strategy now has three possible paths. It could raise the dividend again, sell Bitcoin to fund payouts, or issue new STRC shares below $100. Each option adds pressure to the company’s funding model.
In a separate X post, Saylor said markets closed for the day, volatility remained difficult, and Bitcoin kept working. Peter Schiff replied that the closure only delayed the next possible selloff in MSTR and STRC until Monday.
Schiff also criticized CNBC for not covering STRC’s decline, MSTR’s selloff, its widening discount to NAV, and the possible impact on future stock or Bitcoin sales. The remarks kept attention on Strategy’s STRC funding pressure and Bitcoin holdings.
Related: STRC Slides Below $100 Mark, Saylor’s AI Comment Adds Fuel
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