MicroStrategy preferred stock falls to $75! Despite sufficient reserves to pay 10 months of dividends, why are retail investors still not confident?

MicroStrategy's preferred stock STRC fell to $75. Although its reserves are sufficient to cover 10 months of dividends and MicroStrategy has been continuously buying Bitcoin and increasing cash reserves over the past three weeks, why is it still unable to restore retail investors' confidence?

MicroStrategy Preferred Stock at Deep Discount, Retail Investors' Confidence Tested

MicroStrategy (Strategy, ticker: MSTR) sold a small amount of Bitcoin after years, but although it quickly bought back more, its preferred stock STRC price dropped to $75, remaining below the $100 par value.

Although MicroStrategy has been buying Bitcoin and increasing cash reserves over the past three weeks, under current market pressure, these measures have temporarily failed to restore retail investors' confidence.

Source: Google Finance. MicroStrategy's preferred stock STRC is positioned as a stable income product, but after falling to $75, the discount has reached 25%.

STRC at Deep Discount, Experts Disagree

According to CoinDesk, MicroStrategy's preferred stock STRC is positioned as a stable income product, but after falling to $75, the discount has reached 25%.

MicroStrategy still has sufficient dollar reserves to cover nearly 10 months of dividends, so the core challenge is actually a credit crisis, not an immediate dividend risk.

Benchmark analyst Mark Palmer pointed out, "The deep discount of STRC has reduced the fundraising efficiency of the preferred stock for Bitcoin acquisition, but this does not mean that MicroStrategy's reserve model has failed."

But Two Prime CEO Alexander Blume disagrees. He believes that MicroStrategy founder Michael Saylor's frequent changes in stance and deviation from the plan have damaged retail investors' trust. In a retail-dominated market, trust is key. The leadership's change of course has made retail investors pay the price, which also hinders price recovery.

Source: Strategy Dashboard. MicroStrategy shows its Bitcoin reserve value, mNAV, and cash reserves of $980 million.

STRC Over-Linked to Bitcoin, Stable Income Function Weakened

MicroStrategy currently holds 847,363 Bitcoins, making it the listed company with the largest Bitcoin holdings globally. In the past market uptrend, the company believed that the model of buying Bitcoin, Bitcoin rising & stock price rising, investors buying preferred stock, and MicroStrategy paying high dividends could create a positive cycle.

But CoinDesk's Markets Managing Editor Omkar Godbole pointed out, "MicroStrategy's preferred stock, originally designed to provide stable returns, is now becoming increasingly correlated with Bitcoin's price movements to an unprecedented degree."

Data shows that the 90-day correlation coefficient between STRC and Bitcoin has risen to nearly 0.70, the highest since the product was launched in July 2025, significantly weakening its appeal as a relatively stable source of income.

This month, STRC fell 25% to $75, and Bitcoin also fell over 20% and broke below $60,000. The close correlation has altered the risk profile for income-oriented investors.

Currently, MicroStrategy's huge discount limits the company's fundraising ability. Recently, MicroStrategy was even forced to sell 32 Bitcoins to cover dividends, breaking its long-standing claim that it would never sell Bitcoin. As correlation increases, STRC can no longer provide a buffer against volatility.

• **Related Report:**MicroStrategy's Saylor: I said "you" should never sell Bitcoin, not that the company won't sell

CryptoQuant Has Recommended Pausing Accumulation, But Will MicroStrategy Listen?

In response to the current funding difficulties, some experts have suggested that MicroStrategy should adjust its operational strategy.

Blockchain analytics firm CryptoQuant noted in a report that MicroStrategy's dividend cash buffer has shrunk significantly, with the coverage period dropping from over 7 years at the beginning of 2026 to about 14 months currently.

This is mainly because MicroStrategy spent $1.5 billion in May to buy back convertible bonds, depleting the cash buffer and causing its annual dividend obligation to surge from $300 million at the beginning of the year to $1.2 billion.

CryptoQuant believes that MicroStrategy's cash reserves in mid-June were only $1.1 billion. To bring the STRC price back to par, reserves need to reach about $2.8 billion, equivalent to 24 months of dividend coverage.

More importantly, MicroStrategy currently suffers a book loss of up to $10.6 billion, with all Bitcoins purchased from 2024 to 2026 underwater. Therefore, CryptoQuant strongly recommends that MicroStrategy pause Bitcoin accumulation and bolster reserves, which is the solution to stabilize the market.

Further Reading:
Fortune: MicroStrategy's Magic Gone, 'Death Spiral' Feared, But Two Wall Street Firms Disagree

Wall Street Oracle Tom Lee: MicroStrategy Selling Bitcoin Means Bitcoin Has Bottomed, Market Structure Is Fine