Bitcoin Drop Pressures Strategy as Its STRC Product Hits Record Low

Strategy's preferred stock STRC fell 25% below its target price as Bitcoin slumped, leaving the firm $13.1 billion underwater on its holdings.

Michael Saylor's company Strategy is feeling the pain as Bitcoin's price falls and one of its key financial products keeps dropping.

Strategy is a company famous for one thing: buying massive amounts of Bitcoin (the world's biggest digital currency). To raise money for this, it sells different financial products to investors. One of these is called STRC, or "Stretch" — a type of preferred stock (a special share that pays regular fixed payments, almost like interest from a bank account).

STRC was designed to trade steadily at $100 per share. But on Friday, it dropped to a new record low before recovering slightly.

Here are the key numbers:

STRC fell to $71.25, then firmed to $75.30 — about 25% below its intended $100 price
Bitcoin dropped roughly 5% over the week to about $60,130, near a 21-month low
Strategy holds 847,363 Bitcoin, worth around $51 billion — but that's $13.1 billion less than what they paid (called being "underwater")
STRC currently pays an 11.5% annual dividend (yearly payout to investors)

Why does this matter? Strategy has sold over $10 billion of STRC in under a year. Each share requires regular dividend payments, and those costs are piling up. The company had $2.25 billion in cash in January, but that cushion is now wearing thin.

Analysts warn that if Strategy is forced to sell Bitcoin at a loss to cover its bills, it could hurt regular shareholders. Some experts, like CryptoQuant's research head, even argue the company should stop buying Bitcoin immediately and focus on building up cash.

Many everyday savers bought STRC expecting a safe, steady income — not a 25% loss. As one analyst put it, they "came for yield" and didn't sign up for this kind of drop.

Saylor's response? He acknowledged that "volatility tests every capital structure," but insisted the company stays focused on disciplined money management and long-term value.

The bottom line: Strategy's bold all-in bet on Bitcoin is being severely tested, and investors are watching nervously to see how it manages its cash.

This is an AI-generated summary. Read the original article at: https://decrypt.co/372189/strategy-saylor-volatility-test-strc-new-low-bitcoin-weakness