Echoes of history: From GBTC to STRC

BTC retested near 62k five days ago, and finally reclaimed above 64k this Monday. During the same period, the market discount for STRC narrowed from over 20% to the 12%-18% range, with both stock and crypto markets showing signs of recovery.

An article on the Teaching Chain on June 2, 2026, mentioned that MicroStrategy sold 32 BTC at the end of last month, worth approximately 2.5 million dollars, to pay dividends on STRC preferred shares.

The day before yesterday, the Teaching Chain discussed the two paths MicroStrategy and Michael Saylor (Saylor) faced after STRC broke below its face value.

Since STRC's inception, BTC has fallen over 40%, from 119k to the current 64k, nearly halving. People can’t help but ask, is MicroStrategy still okay?

Memories fade like smoke, and the Teaching Chain can’t help but recall the grayscale BTC trust, GBTC, which once triggered countless leveraged positions.

A Grasshopper on a Rope

In early 2023, panic about a potential collapse of Grayscale was widespread. Over 630k BTC, with a market value of over one billion dollars, was at risk. Media and self-media outlets labeled Grayscale as another ticking time bomb after Three Arrows, LUNA, and FTX.

In short, speculative capital A used real BTC to buy paper BTC (GBTC) to arbitrage and earn positive premiums, continuously locking BTC into Grayscale’s trust vault. A’s BTC was borrowed from B, which is called leverage. B’s BTC wasn’t even its own, but borrowed from C. C’s BTC was high-interest savings, absorbed from retail investors.

A, B, C, D—this forms a grasshopper on a rope.

The chain looks like this: Grayscale <- A <- B <- C <- Retail Investors.

Why doesn’t A borrow directly from C but instead go through B? Because A’s credit isn’t good. And B and Grayscale are actually the same parent company (the parent company), can you believe it? C saw B’s parent’s strength and lent BTC to it.

The Teaching Chain paid special attention to the timeline: the disappearance of GBTC’s premium ended earlier than the end of the bull market. The pressure first transferred to A. The first to bear the pressure, A, went bankrupt in the mid-bear market.

C, at the end of the chain, is the retail investor side, so it’s the slowest to realize. When it finally notices it can’t get its BTC back, the deep bear market has already ended, and the market is at the start of recovery—of course, that’s a later story, because if Grayscale had been broken at that time, it wouldn’t be recovery but a massive crash.

This unintentional game, most importantly, Grayscale held firm, wasn’t broken, and didn’t trigger a collapse. It successfully protected its 630k BTC holdings.

No bloodshed, no killing. The true saying: “One general’s success costs countless lives.”

Grayscale’s Firewall

The reason Grayscale remained safe is simple: its legal structure.

Grayscale is a trust company regulated strictly by U.S. law. Trust assets are legally separate from the operating company; the parent company (DCG) cannot touch them, the sister company (Genesis) cannot pursue them, and outsiders (Gemini) have no right to claim them. No matter how chaotic outside, no one can take the BTC inside the trust.

Many wanted to force Grayscale to sell its coins at a loss, but all failed. Because Grayscale couldn’t do it. It can be said that it’s not unwilling but simply unable.

By voluntarily giving up the freedom to sell coins, it gained the freedom not to be forced to sell. A high-level dialectic of sacrifice and gain.

This is the fundamental reason why GBTC ultimately didn’t collapse. Grayscale’s adherence to principles is only superficial; the real safeguard is the firewall of U.S. trust regulation. Essentially, the credit of GBTC is backed by U.S. legal trust credit.

Everyone knows how the story ends. With the approval and listing of the U.S. BTC ETF in early 2024, Grayscale successfully converted GBTC into an ETF, publicly traded on the U.S. stock market. With a fresh source of liquidity, the bottleneck of 630k BTC holdings was dissolved into the vast liquidity of the U.S. stock market, disappearing into nothingness.

STRC’s Four Questions

Looking back, the FUD about Grayscale’s 630k BTC holdings collapsing back then, and today’s FUD about MicroStrategy selling coins with 846k BTC holdings, seem to be quite similar when you look closely.

Using the story of GBTC from back then to analyze today’s STRC situation, there are four questions worth pondering.

First, what stage is STRC at now?

During the deep bear phases of 2022-2023, GBTC’s discount approached nearly 50%, and the market considered it another ticking time bomb. Currently, STRC’s discount is about 12% to 18%, far from the extreme levels of GBTC back then. Although there are doubts, the panic isn’t as intense as in early 2023.

Such massive FUD alone is enough to trigger a structural market turning point. Back then, Grayscale withstood the FUD of collapse, and the bears’ final attempt failed, leading to the wave of the bull market.

Second, does STRC have a firewall in its legal structure?

STRC is preferred stock, not a trust. It lacks the legal separation protections of GBTC. But its protection comes from its design: a variable dividend mechanism allows STRC to adjust its interest payments during tough times (deferred payments), easing cash flow pressures; and the share-for-dividend issuance mechanism means dividends can be paid in new shares, which dilutes holders’ rights but doesn’t deplete MicroStrategy’s cash reserves. These two features give STRC some “breathing room” in extreme situations. It doesn’t rely on legal firewalls but on the flexibility of its tools.

Most critically, whether the pressure on STRC will transfer to MicroStrategy’s BTC holdings depends on whether this transmission can be cut off. As long as the legal separation is sufficient, forced liquidation and forced selling can be avoided.

Third, is the FUD about MicroStrategy selling coins valid?

Back then, FUD claimed GBTC’s 630k BTC would collapse, but it turned out to be a chain of speculative liquidations on a rope—GBTC itself wasn’t broken. Today, FUD claims MicroStrategy will be forced to sell BTC, but it’s not that easy to break. Its core supports are twofold: first, MicroStrategy’s debt structure is mainly convertible bonds with staggered maturities, making short-term debt repayment manageable; second, Saylor controls about 37.6% voting rights through an A/B share structure, giving him strong influence over company strategy, so he won’t easily be forced to sell Bitcoin reserves at low points. Even if he makes a small gesture of selling, it could serve as a market signal to create a low-price accumulation opportunity.

Fourth, what will happen next?

GBTC’s story ultimately ended with successful ETF conversion, and early investors profited handsomely. Will STRC follow the same path?

The Teaching Chain believes that history doesn’t simply repeat but rhymes. Whether STRC can wait for that turning point depends on two conditions: first, whether MicroStrategy’s management is willing to endure and survive the toughest times; second, whether the market recognizes that the object of panic is mistaken. The real concern should be those leveraged arbitrageurs who added leverage during STRC’s heyday, not MicroStrategy holding 846k BTC.

Helpless flowers fall, but familiar swallows return. The nature of speculative capital doesn’t change; only the game they’re embedded in does.