STRC's Bitcoin Correlation Hits Record High, Undermining Steady Income Appeal
Strategy Inc.'s perpetual preferred stock STRC has seen its 90-day correlation with bitcoin climb to nearly 0.70, the highest since its July 2025 debut. STRC dropped 23% this month to $76, while bitcoin fell nearly 20% to below $60,000, undermining STRC's role as a relatively steadier income vehicle tied to the company's large bitcoin holdings. STRC is a hybrid product with a $100 par value, paying monthly dividends at an annualized 11.5%, adjustable by the board. However, trading well below par limits the firm's ability to raise funds for additional bitcoin purchases, leading to small BTC sales for dividend obligations—a shift from its 'never sell' stance. The rising correlation reduces decoupling from bitcoin's volatility. Market observers are divided: some see the discount as an attractive entry for yield-focused capital, while others worry sustained weakness could strain capital structure and dampen the positive feedback loop for Bitcoin accumulation.
Key facts
- STRC-BTC 90-day correlation hits 0.70, highest since STRC's July 2025 launch.
- STRC fell 23% to $76; bitcoin fell nearly 20% to below $60,000 in the month.
- STRC trades well below $100 par, limiting Strategy's bitcoin purchase capacity.
- Strategy sold small BTC holdings for dividends, shifting from 'never sell' stance.
- Rising correlation reduces STRC's appeal as a steady income source.