This page is for informational and educational purposes only and does not constitute financial, investment, or tax advice. STRC is not a bank deposit, not FDIC insured, and carries risk of loss. Past performance is not indicative of future results. Always consult a qualified financial advisor before making investment decisions.

What Is STRC?

Strategy's perpetual preferred stock. 11.5% yield, paid monthly, powered by Bitcoin.

Ticker
STRC
Par Value
$100
Annual Yield
11.5%
Dividend Freq
Monthly
Exchange
Nasdaq
Type
Preferred Stock
Issuer
Strategy (MSTR)
Launched
July 2025
Contents
What Is STRC? How STRC Works STRC Dividend & Yield Where the Yield Comes From Tax Treatment Capital Stack & Structure Who Is Buying STRC? Risks STRC vs MSTR STRC vs SATA The Bull & Bear Debate How to Buy STRC Scenario Simulator FAQ

What Is STRC?

STRC is a stock you can buy on Nasdaq that pays roughly $0.96 per share every month in cash. That works out to an 11.5% annual return on a $100 share. The price is designed to stay near $100 through a variable-rate mechanism — Strategy adjusts the dividend rate to anchor it there.

It's issued by Strategy (the company formerly known as MicroStrategy), which holds 843,738 Bitcoin on its balance sheet. The Bitcoin is what backs the whole thing.

Think of it like this: you give Strategy $100. They buy Bitcoin with it. In exchange, they pay you about $11.50 per year in monthly installments. The share price stays near $100 because Strategy adjusts the interest rate to keep it there.

How STRC Works

Michael Saylor — the co-founder and executive chairman of Strategy, and the architect behind the company's Bitcoin treasury — uses an airplane analogy to explain how the pieces fit together. There are four moving parts:

⛽
The Fuel
The coupon itself. 11.5% of $100 par = $11.50/year per share, paid monthly. At $8.54B outstanding, that's about $982M per year in dividends Strategy must pay.
✈️
The Autopilot
The variable rate. Strategy adjusts the dividend monthly to anchor the price near $100. Rate goes up when price falls, down when price rises. Volatility shows up in the yield, not the price.
🏗️
The Airframe
The balance sheet. 843,738 BTC (~$65B) backs the entire capital structure. Strategy's credit-case model assumes Bitcoin grows at 10% per year — producing $6.6B of appreciation against $1.49B in annual obligations.
🪢
The Seatbelts
Cumulative dividends. If Strategy defers a payment, it accrues and compounds monthly. All missed payments must be made whole before MSTR common gets anything.

One key design choice worth understanding: STRC never has to be redeemed. There is no maturity date. If someone wants out, they sell on the open market — Strategy doesn't buy it back. In Saylor's words:

"We constructed this instrument so it would be extraordinarily robust so we can put hundreds of billions of dollars of yield coins on top of it... We created a perpetual preferred that never comes due. When someone decides they want to sell $2 billion of STRC, we're not redeeming it. There is no liquidation right. There is no put right."

— Michael Saylor, Coindesk Interview

That's a feature from Strategy's perspective — no balloon payment, no redemption run. But it's also something holders need to understand: your only exit is the secondary market at whatever price it trades.

STRC Dividend & Yield

STRC pays a dividend set as a percentage of its $100 par value, not the price you paid. This distinction matters.

💵
Buy at $100
You get $11.50/yr = 11.5% yield
📉
Buy at $90
Still get $11.50/yr = 12.78% yield
📈
Buy at $105
Still get $11.50/yr = 10.95% yield

The dividend rate has moved over time as the autopilot mechanism kicks in:

Date Dividend Rate Context
July 2025 (IPO)9.0%Launch rate
Oct 202510.0%Rate raised to support price
Jan 202610.5%Continued price support
Mar 202611.0%Bear market adjustment
May 202611.5%Current rate

Want to calculate your own monthly income? Use the STRC Dividend Calculator.

Where Does the Yield Come From?

Bitcoin doesn't generate cash flow. No interest, no dividends, no rent. So where does the 11.5% come from? Three sources:

1
New STRC share sales (ATM program) — the primary funding source. When investors buy new STRC at ~$100, that capital funds existing dividends and buys more Bitcoin. In April 2026 alone, Strategy sold $3.2B of STRC.
2
$2.25B USD cash reserve — Strategy keeps this specifically to bridge drawdowns. It covers roughly 18.1 months of all preferred and convertible obligations without selling any Bitcoin.
3
Bitcoin sales (if needed) — On the Q1 2026 earnings call, Saylor explicitly named selling Bitcoin as a tool to secure dividends. At current prices, Strategy would need to sell about 1,530 BTC monthly to fund all STRC dividends — a fraction of daily market volume. Saylor's take on this: "If we were to fund all of our dividends exclusively by selling Bitcoin over the next year, we would buy 21 Bitcoin for every one Bitcoin we sold. So it's kind of a big nothing burger from an economic point of view." (Coindesk Interview)

The core mental model is straightforward: Strategy expects Bitcoin to appreciate at 10%+ annually (their conservative "credit case"). If it does, the ~$65B asset base generates multiples of the $1.49B annual obligation. The 11.5% coupon is the cost of capital. The spread between Bitcoin's growth rate and that coupon is where the math works.

The Simple Math
$65B BTC × 10% growth = $6.5B annual appreciation
vs. $1.49B annual dividend + interest obligations

STRC Tax Treatment

This part changes the picture for a lot of people. STRC dividends are currently classified as return of capital (ROC) for US tax purposes. Here's what that means in practice:

🔄
While Basis > $0
No income tax on dividends. Each payment reduces your cost basis instead. On a $100 purchase, your basis drops by $11.50/yr.
💰
After Basis Hits $0
Subsequent dividends become taxable at long-term capital gains rates — not ordinary income rates. At 11.5% yield this takes about 8.7 years.
Tax-Equivalent Yield
Annual Yield ÷ (1 − Tax Rate)
11.5% ÷ (1 − 0.15) = 13.5%

For a high-bracket investor, the deferral effectively turns 11.5% into something closer to an 18% taxable-equivalent yield in real-world terms.

Two important caveats: The ROC classification is determined year by year based on Strategy's earnings and profits position. What's true for 2025 isn't guaranteed for 2026. And your actual tax outcome depends on your situation — talk to your tax person.

Capital Stack & Structure

Where a security sits in the capital stack determines who gets paid first when things go south. Strategy's stack is relatively simple:

Convertible Bonds (Senior Debt)
Paid first. ~$6B outstanding.
STRC & Other Preferred Stock
Paid second. ~$8.54B STRC outstanding. Cumulative dividends.
MSTR Common Stock
Paid last. Gets everything left over — or nothing.

STRC is senior to common equity holders (MSTR shareholders) but junior to the convertible bondholders. In good times this order doesn't matter. In bad times, it matters a lot — bondholders get paid before STRC holders, and STRC holders get paid before common shareholders.

James Lavish, CFA, boils the whole thing down to one sentence: "Digital credit is a perpetual preferred share with Bitcoin reserves behind it. Three words doing the work on the front end, plus one new thing on the back end." That "new thing" is what makes this different from any preferred stock that's come before — the reserve asset is Bitcoin, not bonds or real estate or cash. (The Informationist)

Who Is Buying STRC?

Based on SEC filings and trading data, STRC ownership is roughly 82% retail investors. As James Lavish noted: "There is a real temptation to chase the yield without understanding the structure." That dynamic shows up clearly in who's actually holding this thing.

Yield-Focused Retail
The largest cohort. Individual investors comparing STRC's 11.5% to money market rates or Treasury yields, often drawn by the headline rate and monthly payout.
Bitcoin-Curious Income Seekers
People who are interested in Bitcoin exposure but don't want the volatility of MSTR common stock. STRC's price stability near $100 is the draw.
Tax-Bracket Optimizers
High-income earners attracted by the return-of-capital tax treatment, which defers tax on dividends until cost basis reaches zero — currently estimated at roughly 8.7 years.
Institutional Allocators
A small slice so far. Some fixed-income desks and family offices have taken positions, though Onramp CEO Michael Tanguma argues that any institution sophisticated enough to underwrite the credit profile would rationally allocate to spot Bitcoin instead.

Risks of Investing in STRC

Every yield instrument trades risk for return. The 11.5% on STRC comes with meaningful risks that deserve honest examination.

1
Multi-Year Bitcoin Drawdown

If Bitcoin crashes 80%+ and stays down for years, the asset base shrinks dramatically. The $2.25B cash reserve covers roughly 18 months of obligations. Behind it sits ~$65B of Bitcoin at current prices. But a prolonged decline changes the math.

2
Capital Markets Close

The STRC machine depends on Strategy being able to sell new shares when conditions are right. New issuance funds Bitcoin purchases. Bitcoin backs the dividend. If capital markets close to Strategy for an extended period, the flywheel slows.

3
Dividend Deferral

Strategy can defer dividends. The payments accrue and compound — the seatbelt. But during deferral, your monthly cash stops. If you depend on the income, that interruption is real.

4
Tax & Regulatory Changes

The ROC classification is set year by year. A reclassification would change the tax math. Broader regulatory changes targeting Bitcoin treasury companies are also possible, even if unlikely in the near term.

5
Growing Liabilities

As Coffeezilla pointed out in his debate with Strive's CRO: the more successful STRC is, the larger the dividend obligations become, and the more Bitcoin needs to appreciate to sustain them. Success itself creates a larger overhang if things go wrong.

6
The Dividend Ratchet

Since launching at 9%, Strategy has raised STRC's rate to 11.5% — each increase a permanent cost added during price pressure. As Onramp CEO Michael Tanguma put it: "A capital structure that survives volatility only by adding permanent obligations is a structure with a finite number of cycles in it. STRC has consumed one of them and has no mechanism for recovering the cost." The drawdown reversed. The higher dividend rate didn't.

7
Path Dependence

If you hold Bitcoin through a 70% crash and it recovers, your Bitcoin is whole. STRC doesn't work that way. The same crash that Bitcoin recovers from can permanently impair STRC through forced Bitcoin sales, dividend deferrals, or further rate ratchets. Tanguma's structural credit model estimates that even at a 15% Bitcoin CAGR, there's roughly a 45% probability STRC ends below $85 over a full cycle.

STRC vs MSTR

Same company, same Bitcoin on the balance sheet — but two completely different instruments. The way Strive's Chief Risk Officer Jeff Walton explained it: "When we take the Bitcoin and we separate risk tranches... the seniority provides a lower risk position compared to the equity. We are carving off excess risk and excess return and that excess risk return goes to our common stock."

In plain English: STRC gets the steady income, MSTR gets the wild ride.

STRC MSTR
TypePreferred stockCommon stock
PurposeSteady incomeBitcoin price exposure
Dividend11.5% annually, monthlyNone
Price behaviorAnchored near $100Highly volatile (59%+ implied vol)
Implied Volatility~6%~59%
Bitcoin upsideNone (capped near par)Full (leveraged ~1.5x beta)
Capital stackSenior to commonJunior (last in line)
Saylor's analogyPassenger jetRocket ship

STRC vs SATA

There are currently two "digital credit" instruments on the market. STRC from Strategy and SATA from Strive (ASST). Same concept, some key differences:

STRC SATA
IssuerStrategy (MSTR)Strive (ASST)
Yield11.5%13.0%
BTC Holdings843,738 BTC (~$65B)15,000 BTC (~$1.2B)
Cash Reserve$2.25B$148M
Debt~$6B convertible bondsNearly zero
Outstanding~$8.54B~$496M
Liquidity$250M-400M/dayMuch less liquid
Higher yield?NoYes — compensates for lower liquidity

For a detailed side-by-side with calculators, see the STRC vs SATA comparison.

The Bull & Bear Debate

In May 2026, YouTuber Coffeezilla (who's built a reputation investigating financial schemes) debated Jeff Walton, Strive's Chief Risk Officer, about whether digital credit instruments like STRC and SATA are sustainable — or something more troubling. Here's a summary of both sides.

The Bull Case (Jeff Walton)
  • Reserves are real. Unlike a Ponzi, these companies have transparent Bitcoin reserves you can verify in real-time. "A Ponzi scheme doesn't have reserves. This capital vehicle has reserves."
  • Leverage is minimal. Strive has less than 1% debt on its balance sheet. The preferred equity is not debt — there's no principal repayment obligation.
  • Bitcoin's TAM is massive. The global credit market is $300T. Bitcoin is $1.6T. Institutional adoption (BlackRock, Morgan Stanley, banks) is still early. A 30% CAGR for the next 8-10 years is the underwrite.
  • The math is transparent. You can calculate the credit risk 24/7/365 because the balance sheet is public in real-time — unlike traditional corporate bonds where financials are months old by the time you see them.
  • Multiple tools to pay dividends. New STRC sales, cash reserves, Bitcoin sales, equity issuance. The dividend can be funded many ways.
The Bear Case (Coffeezilla)
  • Circular funding. You sell preferred stock, buy Bitcoin with it, the Bitcoin "backs" the preferred stock. The yield on a non-yielding asset has to come from somewhere — and the primary source is selling more preferred stock.
  • Growing liabilities. The more successful STRC/SATA are, the bigger the obligation pile grows. That means Bitcoin needs to appreciate at a higher and higher absolute number each year to sustain payments.
  • 13% cost of capital is expensive. If Bitcoin doesn't appreciate 13%+ per year, you're losing money on the trade. Going from 12% to 13% yield in 5 months is a bad sign, not a feature.
  • 30% CAGR is unrealistic long-term. At 13% compounded for 50 years, each Bitcoin would cost $36M. At some point the adoption S-curve flattens.
  • Marketing vs. reality. Calling it "digital credit" has debt connotations. Comparing it to bank accounts or money markets (while disclosures say it's neither) is misleading the average buyer.

The full debate is worth watching: Is $MSTR a Scam? ft. Coffeezilla (True North).

Both sides agree on the core question: can Bitcoin appreciate enough over the long term to sustain the dividend? If you believe Bitcoin will compound at 10%+ for decades, the math works. If you think Bitcoin's growth rate is slowing toward inflation-level returns, the math eventually breaks.

The "Built on Sand" Critique

In April 2026, Michael Tanguma, CEO of Onramp Bitcoin (a custody-focused Bitcoin company), published what may be the most thorough structural critique of STRC called "Built on Sand." His argument isn't that STRC will collapse tomorrow — it's that the foundation has never been tested, and the marketing language obscures what the instrument actually is.

His five layers of risk, in order:

1
Custody is unsettled. Strategy holds 843,738 BTC through custodians. Where it sits, who holds the keys, what jurisdiction governs it — none of these have been stress-tested. The entire structure sits on top of custody, and custody is the one thing nobody's talking about.
2
This construct has never existed before. A perpetual preferred on top of a closed-end Bitcoin fund on top of an operating business on top of $8.2B in senior debt — there's zero historical precedent. The current capital structure has never been tested through a full Bitcoin cycle.
3
Governance is pure board discretion. The board can reduce, suspend, or defer the dividend at will. There are no covenants protecting holders. The 11.5% rate is a posture, not a contractual promise. As Tanguma writes: "The 11.5% is a posture. The structure is the actual instrument."
4
The target buyer can't logically exist. Wealthy investors don't need 11.5% from a risky wrapper — they already have Treasuries and investment-grade bonds. Income-dependent investors can't afford the risk of a 9-month-old preferred with a discretionary dividend. The result: 82% retail holders, not the institutions the marketing targets.
5
Damage is asymmetric and permanent. Bitcoin holders recover from drawdowns. STRC holders may not — because each defensive response (rate hikes, forced BTC sales, deferrals) permanently impairs the holder's position even if Bitcoin recovers fully.

Tanguma's sharpest point targets the marketing language. Consider the phrase "backed by bitcoin" — as he puts it, that "implies collateralization. STRC holders have no direct lien on any bitcoin. They hold an unsecured preferred equity interest in a corporation that happens to own bitcoin. The $8.2 billion in senior creditors are paid first." He makes similar arguments about other common descriptors: "money-market-like" describes an instrument with none of the properties of a money market. "Tax-free" is the IRS confirming Strategy has no earnings to distribute. "Low volatility" describes the chart, not the instrument — the apparent stability has been manufactured by seven consecutive defensive dividend raises.

Worth noting: Tanguma runs a Bitcoin custody company (Onramp), so he has a clear perspective that self-custody of Bitcoin is superior to any wrapper. But his structural analysis doesn't depend on that bias — the five layers of risk he identifies are real regardless of where you stand on custody philosophy. The full piece is worth reading: Built on Sand.

How to Buy STRC

STRC trades on Nasdaq under the ticker STRC. You can buy it through any brokerage that supports US equities:

1
Open a brokerage account — Fidelity, Schwab, Interactive Brokers, Robinhood, Vanguard, and others all support STRC. Some brokerages may list it under preferred stocks.
2
Search for ticker STRC — It should appear as "Strategy Variable Rate Series A Perpetual Stretchable Preferred Stock" or similar.
3
Place a limit order near $100 — STRC typically trades within a few cents of par. Using a limit order avoids overpaying on a wider spread.
4
Dividends auto-deposit monthly — Once you hold shares through the ex-dividend date, the monthly payment hits your brokerage account automatically.

Frequently Asked Questions

STRC Scenario Simulator

Model Bitcoin growth, dividend cost, and crash scenarios over 10 years.

BTC annual growth +15%
STRC dividend rate 11.5%
Crash year (BTC one-year drop) none
Crash severity -50%
Moderate. BTC growth covers dividend cost but limited cushion for shocks.
BTC treasury yr 10
$261.71B
Reserve yr 10
$2.25B
Amplification yr 10
4%
Spread (BTC − div)
+3.5pp
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