TLDR
- STRC traded as low as about $82.50 on June 18 before recovering.
- STRC closed at $88.59, below its $100 stated amount and $90 IPO price.
- Arca CIO Jeff Dorman said Strategy may need to sell Bitcoin or MSTR stock.
- Dorman assigned a 25% probability to a $3B to $4B Bitcoin sale by Strategy.
- Strive CEO said the STRC and SATA drops were caused by leverage liquidations.
Strategy’s preferred stock STRC remained under market scrutiny after a sharp intraday selloff pushed the security to record lows, while Arca Chief Investment Officer Jeff Dorman warned that the company may need to sell Bitcoin or common stock to restore confidence in its capital structure.
STRC, Strategy’s Variable Rate Series A Perpetual Stretch Preferred Stock, traded as low as about $82.50 on June 18 before recovering to close at $88.59. The move left the preferred stock well below its $100 stated amount and below its $90 initial public offering price, raising questions about one of the financing tools connected to Michael Saylor’s Bitcoin accumulation strategy.
Bitcoin also weakened during the same period, falling below $63,000 after losing the $65,000 and $64,000 levels. The decline added pressure to crypto-linked securities, including Strategy’s preferred stock and common equity, as investors assessed the connection between Bitcoin prices, dividend obligations, and future capital raising.
STRC Selloff Raises Questions Over Strategy’s Funding Model
STRC was designed to trade near $100 while paying cash dividends to holders. Strategy’s website lists an 11.5% annual dividend rate for June, with the rate adjusted monthly to encourage trading around the stated amount.
When STRC trades near or above par, Strategy can issue additional preferred shares through an at-the-market program and use the proceeds for Bitcoin purchases or other corporate purposes. When the preferred stock trades far below par, that channel becomes less efficient because each new share sale raises less cash.
At prices near $85, STRC’s effective yield rises to about 13.5%. Market commentators said that may pressure Strategy to raise the dividend rate if it wants the stock to move back toward $100, although a higher rate would also increase the company’s recurring cash obligation.
Strategy reported no STRC ATM sales in the week ended June 7 and had about $17.51 billion of remaining STRC issuance capacity. The unused capacity remains available, but the market discount makes the timing and pricing of future issuance more difficult.
Arca CIO Says Strategy Faces Hard Choices
Arca CIO Jeff Dorman said Strategy may be forced to make a difficult decision if STRC remains deeply discounted. He said one option would be selling a large amount of Bitcoin or MSTR common stock to support STRC and reduce uncertainty across the capital structure.
Dorman assigned a 70% probability to Strategy continuing its current path of selling smaller amounts of MSTR common stock each month, even if those sales occur at less favorable levels. He said that approach could offer some support for STRC holders while leaving Bitcoin mostly untouched, but it could pressure MSTR shares.
MSTR pickle continues: What I laid out 2 weeks ago is still the only viable path to save $BTC and $MSTR in the short-run.
Either sell an enormous amount of BTC and MSTR to help bring $STRC back up near par, and at least buy yourself some time, or continue to watch every part… https://t.co/JAztCieaZ1
— Jeff Dorman (@jdorman81) June 18, 2026
He also assigned a 25% probability to Strategy selling $3 billion to $4 billion worth of Bitcoin. Dorman said such a move could buy time for the company and help STRC, while creating short-term pressure on Bitcoin.
Dorman reserved a 5% probability for a more severe option, in which Strategy could stop payments on preferred securities where dividends are discretionary. He said that could reduce a $1.7 billion annual cash outlay but might close capital markets access to the company and sharply reduce preferred share values.
Strive CEO Calls Move a Liquidation Event
Strive CEO said the selloff in digital credit products was caused by leverage liquidation rather than a deterioration in credit quality. He described June 18 as the most difficult day in the history of digital credit, noting that STRC fell to about $82.50 while Strive’s SATA also dropped from par into the low $90s before rebounding.
Today was the most difficult day in the history of Digital Credit.$STRC traded as low as $82.50 before recovering sharply. $SATA traded from par down to the low 90s before also rebounding. It was a difficult day for many investors.
What happened today was a leverage…
— Matt Cole (@ColeMacro) June 18, 2026
He said investors may have borrowed against preferred stock positions after seeing low volatility and attractive yields, creating forced selling when prices moved lower. In his view, margin calls and balance sheet constraints caused prices to move away from underlying fundamentals.
The Strive CEO said dividend reserves at Strive remain intact and that the company is not under stress. He said the credit profile of SATA had not materially changed despite the volatility, while adding that the market is still learning how digital credit instruments behave under pressure.
Strategy has said its Bitcoin reserve remains large enough to support preferred dividends and interest expenses over a long period. In its latest filing, the company said its Bitcoin reserve was valued near $55 billion and could cover about $1.7 billion in annual dividends and interest expenses for 32 years.
