Strategy (MSTR)'s STRC, Is the Fear Exaggerated?... "Bitcoin (BTC) Must Go to $10,000 to Collapse"

▲ Strategy (MSTR), STRC, Bitcoin (BTC)/AI generated image

Michael Saylor once again emphasized the turnaround of Strategy (MSTR) after its 2022 crisis. The Bitcoin (BTC) holding strategy has returned with a financial capacity of $48 billion, but the new preferred stock STRC is facing a test in 2026.

According to cryptocurrency media outlet BeInCrypto on June 20 (local time), Saylor stated that Strategy's Bitcoin and cash holdings exceed its debt by approximately $48 billion. This remark came as STRC traded significantly below its target price of $100.

Strategy held approximately 130,000 BTC in October 2022. Following the FTX collapse, Bitcoin fell below $16,000. Saylor explained that at the time, the company's debt exceeded its Bitcoin and cash holdings by approximately $300 million.

Reflecting a 10-for-1 stock split in 2024, the MSTR stock price was approximately $13 at that time. Since then, Strategy has raised over $60 billion. Its current Bitcoin holdings have increased to approximately 843,700 BTC.

Saylor stated, "At the time of my October 2022 speech, Bitcoin was trading around $20,000." He added, "Today, our BTC and dollar holdings exceed our debt by approximately $48 billion." He also expressed gratitude to investors who maintained a long-term perspective.

The problem is STRC. STRC is a product officially named Variable Rate Series A Perpetual Stretch Preferred Stock. It was designed to trade around $100 but recently traded in the high $80s. Although Strategy raised the dividend rate to 11.5%, it was also pointed out that STRC is not a Bitcoin-backed product but a credit product with a priority claim on residual assets.

Michaël van de Poppe, founder of MN Capital, downplayed the possibility of an STRC collapse. He asserted, "STRC will not collapse in this cycle; for that to happen, Bitcoin would have to drop to $10,000." In contrast, James Van Straten pointed out that about 80% of STRC investors are retail investors, analyzing that messaging issues regarding the product's nature amplified the fear.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*