Opinion: STRC fell below $100, and Strategy's perpetual motion machine for buying coins has slowed down.

Author: @JulianLuck1121

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The $100 face value is the cornerstone of Strategy’s financing magic.

In the past week, Strategy’s perpetual preferred stock STRC fell below the $100 face value, with a low of $99.06, trading volume sharply decreased to about 50% of the 30-day average, and it has continued to trade at a discount.

The financing efficiency of STRC directly determines whether Strategy can continue to increase holdings. Once STRC falls below face value, it means Saylor’s Bitcoin buying engine, fueled by financing, is slowing down.

STRC’s 11.5% high yield lock-in price, Strategy creates a perpetual buy-the-dip machine

In July 2025, STRC was officially launched, solving Saylor’s pain point: continuously raising funds from traditional capital markets to buy Bitcoin without diluting MSTR voting rights.

The original design of STRC was to keep the trading price near the $100 face value, ensuring the company could continuously raise funds through the “At-the-Market” (ATM) issuance program.

If the price remains below $100, the board will increase dividends to attract investors seeking stable cash flow to support the price;

If the price is significantly above $100, dividends will be maintained or reduced to lower financing costs.

Starting from an initial 9% annual dividend, STRC has increased its dividend for seven consecutive months, reaching 11.5% so far. Continuous investors, seeking stable high yields, keep entering, allowing STRC to stay above face value long-term. Saylor can then use the ATM program to convert traditional market funds into Bitcoin market buying power.

Additionally, Saylor abandoned the traditional net profit valuation model used in capital markets, instead adopting a “Bitcoin gain” indicator to define Strategy as a “Bitcoin-based” company.

This indicator measures the percentage growth in Bitcoin holdings per share of common stock.

In Q1 2026, Strategy achieved a 6.2% Bitcoin gain, with a full-year target of 9.5%.

STRC is the leverage tool to achieve this goal: by issuing preferred stock with fixed financing costs, it buys Bitcoin with long-term appreciation potential.

According to Saylor’s calculations, as long as Bitcoin’s long-term annualized growth exceeds 2.05%, MSTR shareholders will continue to benefit.

Over the past half year, this logical cycle has repeated: issue STRC for financing → buy Bitcoin → Bitcoin price rises → stock market value increases → STRC becomes more popular → raise more money to buy more Bitcoin.

STRC is like an endless printing press, supplying Saylor’s Bitcoin empire with continuous ammunition.

STRC falls below face value, Strategy deploys a “semi-monthly dividend” trick

On March 23, Strategy announced a new ATM plan, selling up to $21 billion in common stock, $21 billion in STRC preferred stock, and $2.1 billion in STRK preferred stock, which boosted Bitcoin market activity in April.

From early to mid-April, STRC’s trading volume continued to rise, reaching a peak last week (April 13-19), when Strategy bought a large amount of 34,164 Bitcoin, worth about $2.54 billion, the largest purchase since November 2024 and the third-largest in history.

However, since last week, STRC’s trading volume has generally declined, with the average daily volume this week roughly halved compared to the 30-day average.

The $100 face value is the central axis of STRC’s entire financing flywheel. Only when it reaches $100 will the ATM issuance trigger, thus turning on the printing press.

In early April, seeing “encouraging sales,” Strategy stated it would maintain the 11.5% dividend rate and ended its seven-month dividend increase cycle.

PANews believes the company’s intention was to send a signal of confidence: that interest rates have stabilized and the price is near parity. However, in investors’ eyes, this move was misinterpreted as: the company’s financing ability has peaked, casting doubt on the later gains of Bitcoin.

Among STRC holders, retail investors account for as much as 80%. Their motivation to enter is driven by the inertia of “monthly dividend increases and prices staying above face value.”

Moreover, for STRC, a preferred stock with strong bond-like attributes, a long-term high benchmark interest rate means the high dividend yield is also being diluted by rising risk-free rates.

When STRC’s price falls below face value, ATM market-based issuance loses its meaning. Discounted issuance will further depress the price, creating a vicious cycle.

In the last week of April, if STRC still does not return to face value and financing remains halted, this largest Bitcoin market bull may once again press pause. The Bitcoin market will lose an additional $10-2B in weekly marginal buying support.

However, it is normal for STRC to fall below face value. Historically, on ex-dividend days (the trading day after the record date for dividend distribution), STRC has averaged a decline of 45 cents, taking about 12 days to return to face value.

In response to this characteristic, Strategy quickly came up with another trick.

It announced that on April 28, it would initiate a shareholder vote proposing to increase the dividend payout frequency from monthly to semi-monthly.

This is a precise psychological tactic targeting retail investors. By shortening the dividend cycle, it reduces the price jumps caused by ex-dividend dates.

Semi-monthly cash flows can significantly reduce reinvestment delays for investors, making the instrument more attractive to retail investors and income-focused funds sensitive to cash flow.

If the proposal passes, STRC will become one of the few listed equity instruments worldwide offering bi-weekly dividends.

To counter market skepticism about a Ponzi scheme, Strategy also emphasized its holdings of non-Bitcoin assets. It disclosed that the company currently holds about $2.25 billion in cash reserves, enough to cover all preferred dividends for about 30 months without issuing new shares or selling Bitcoin.

Additionally, its traditional business of business intelligence software generates $320 million in gross profit annually, ensuring the company’s survival in extreme market conditions.

4.3 Times Bitcoin Reserves Spark Ongoing Controversy and Hidden Chronic Blood Loss Risks

Although STRC is backed by Bitcoin reserves, controversy surrounding this instrument has never ceased.

Traditional finance experts like Peter Schiff argue that Bitcoin itself produces no income, and STRC’s high dividend yield is actually sustained by new investor inflows or sacrificing MSTR shareholders’ interests.

Their logic is: Bitcoin price drops → STRC price declines → financing function is lost → unable to continue buying Bitcoin to support the price → forced to sell Bitcoin to pay dividends → Bitcoin price further declines.

While Strategy can intervene proactively to prevent a “death spiral,” it will face a dilemma: either significantly dilute MSTR shareholders’ equity to raise funds or continue to increase yields to maintain attractiveness, paying higher financing costs.

Therefore, STRC is unlikely to experience a UST-style death spiral but does face a “self-reinforcing” downward risk, more akin to “chronic blood loss.”

Strategy counters that the STRC model is based on Bitcoin’s long-term deflationary appreciation. As long as Bitcoin’s appreciation rate exceeds financing costs, preferred stock financing will generate a positive asset accumulation effect, not a fund transfer from one side to another.

It disclosed that Bitcoin reserves currently cover the principal of preferred stock by more than 4.3 times, meaning only if Bitcoin drops below about $18,000 will STRC face actual insolvency.

However, capital markets tend to react before fundamentals do. Before reaching this threshold, the secondary market price of STRC may collapse due to panic in the Bitcoin market.

It is also important to note that investors trading STRC often overlook its underlying legal definition. Nominally, it has a face value and fixed dividends, but legally, it is an equity security, with no mandatory principal repayment or fixed maturity date.

In the capital hierarchy, STRC ranks after convertible bonds, secured debt, and other debt categories.

While the 11.5% high yield is attractive, it implicitly involves credit risk and liquidity traps. Liquidity is always the primary survival principle.

In the “Bitcoin-based” journey, STRC falling below face value will be a common minor episode. Ensuring the structural robustness of the financing machine while pursuing larger scale is the key to winning this long race.