STRC Falls Below Par Value, Strategy’s Bitcoin Funding Model Faces Market Pressure
Strategy’s STRC Slump Tests Bitcoin-Backed Funding Model and DeFi Stability
Strategy’s preferred stock STRC (Stretch) has come under market pressure after falling nearly 20% below its par value of $100, raising concerns among both traditional finance (TradFi) investors and DeFi platforms that rely on the asset as collateral for stablecoins.
The situation is becoming a major test for a financial model that combines traditional market instruments with crypto-related funding strategies.
What Is STRC?
STRC is a perpetual preferred stock launched by Strategy (Nasdaq: MSTR) in July 2025 with a $100 par value. Its main feature is a variable dividend rate that the company can adjust each month to help keep the market price close to $100.
As of June 2026, STRC offers an annual dividend yield of 11.5%, up from 9% at launch after seven consecutive increases.
Although often linked to Bitcoin, STRC is not directly backed by Strategy’s Bitcoin holdings. Instead, it functions more like a credit instrument rather than a direct Bitcoin exposure.
When STRC trades near or above $100, Strategy can issue more shares, raise capital, and buy additional Bitcoin. If the price drops below par, that fundraising strategy becomes less effective.
Why Did STRC Fall?
Last week, STRC dropped to $82.53, its lowest level since launch, before recovering slightly to around $88 to $91.
The decline was caused by several factors. Bitcoin fell sharply from above $80,000 in mid-May to below $60,000 on June 5, putting pressure on overall market sentiment.
At the same time, competitor Strive introduced a similar product called SATA, offering a higher 13% yield, attracting investors away from STRC.
Strategy also reduced its cash reserves after buying back $1.5 billion worth of convertible notes due in 2029 at an 8% discount.
Market pressure increased further after the Federal Reserve signaled a more aggressive stance on interest rates on June 17, negatively affecting risk assets like Bitcoin.
DeFi Stablecoins Also Felt the Impact
The issue spread beyond traditional markets because several DeFi protocols use STRC as collateral for stablecoins, mainly because the asset generates real cash flow through dividends.
One major example is Apyx Finance, the issuer of stablecoin apxUSD, whose reserves are largely backed by STRC shares.
As of March 2026, Apyx held around 288,888 STRC shares worth approximately $29 million, while apxUSD supply had grown to nearly $500 million.
When Bitcoin and the broader crypto market sold off earlier this month, apxUSD briefly lost its peg and dropped to $0.93, with some reports showing lows near $0.90.
This happened because when STRC falls in value, the reserve backing the stablecoin also declines.
Apyx stated that this behavior is expected since the stablecoin is backed by preferred equity rather than cash reserves, meaning price volatility is part of the design.
Traditional Finance Model Repackaged for Crypto
Despite appearing innovative, STRC’s structure is based on financial products traditional markets have used for decades.
Its mechanism resembles adjustable-rate preferred shares, perpetual bonds with reset coupon rates, and repo-style financing where yield-generating assets are used as collateral.
The core risk remains the same: when collateral value drops sharply, the stability of the entire product can come under pressure.
Bitcoin Remains the Biggest Risk
Analysts say the biggest concern is Strategy’s heavy dependence on Bitcoin.
According to Bitcoin Treasuries, as of June 22, 2026, Strategy holds 847,363 BTC, acquired for roughly $64.1 billion, with an average purchase price of $75,646 per Bitcoin.
With Bitcoin currently trading in the low $60,000 range, the company is sitting on approximately $9.3 billion in unrealized losses.
If Bitcoin continues to decline over a longer period, Strategy may be forced to issue more shares under unfavorable conditions, sell additional Bitcoin holdings, or reduce dividend payments.
For DeFi protocols and stablecoins built around STRC, that scenario represents a major risk the market has not fully tested yet.
