Digital Credit Preferred Shares from Bitcoin Treasury Firms Suffer Worst Day on Leverage Unwind
Digital credit preferred share offerings from Bitcoin treasury firms suffered their worst day ever on Thursday, according to Strive CEO Matt Cole, who blamed leveraged positions for the price plunges while defending the underlying credit quality. Cole posted on X that the event was a leverage liquidation, not a deterioration in credit. SATA and STRC, respective products from Strive and Strategy, fell well below their par values, closing at $97.71 and $88.59 after trading as low as $92.88 and $82.53. Both saw outsized trading volumes on Thursday, with $153 million and $941 million respectively. Strive's Chief Risk Officer noted that leverage appears to have been flushed, with fundamentals intact. Questions about dividend payments have caused skepticism, with Strategy selling 32 BTC last month to meet obligations. MSTR fell 3.46% to $112.53, down over 32% in the past month. U.S. markets were closed Friday for Juneteenth.
Key facts
- SATA and STRC fell to $97.71 and $88.59, well below $100 par value.
- Strive CEO Cole attributes plunge to leverage liquidation, not credit quality.
- Trading volumes surged to $153M (SATA) and $941M (STRC) on Thursday.
- Strategy sold 32 BTC last month for $2.5M to pay dividends.
- MSTR down 32% in past month, closed at $112.53 on Thursday.