Big news! In just 8 days, Strive vaporized $7.08 million—preferred-stock cross-holdings have exposed the “cancer” in the Bitcoin treasury: Is your $BTC still betting on faith?

Come, pull up a stool and sit down. Today we're not talking about anything else—just a landmine most retail investors overlook: Bitcoin preferred shares. They are no longer the "stable income tool" you imagined.

Strive, the world's seventh-largest Bitcoin holder, filed a document on June 29. What did it say? It holds 505k shares of Strategy's preferred stock STRC. From June 18 to 26, the shares didn't move, but their book value dropped from $505k to $44.74M. In eight days, $7.08 million vanished. The per-share valuation slid from $88.59 to $74.57.

You might think: Isn't this just an unrealized loss? No liquidation. But look through the structure behind it—Strive itself holds 19,864 BTC, $141.7 million in cash, and has issued its own preferred shares, SATA. Yet the most glaring figure in its financial report isn't those numbers; it's the collapse in value of its STRC preferred holdings. It's like two people both holding IOUs from each other—once one person's IOU depreciates, the other's balance sheet gets uglier.

The market has been arguing: Is STRC a stable-yield bond or a risk asset tied to BTC price, liquidity, and dividend-paying ability? Strive's report gives direct testimony—it's the latter. Once STRC trades at a discount, Strive must recognize losses in its financials. If Strive's own SATA also comes under pressure, the entire preferred share sector of the Bitcoin reserve industry could fall like dominoes.

Now back to the strategist—Strategy. On June 29, it also released a "Digital Credit Capital Framework." What does that mean? It tells the market: I know you're worried I can't afford dividends, so I have a full toolkit ready. As of June 28, it had $2.55 billion in cash reserves, and the board mandated: enough must be reserved for dividends and interest over the next 12 months. What if cash isn't enough? It can sell Bitcoin or conduct additional issuance.

It raised STRC's annualized dividend from the original level to 12%, paid twice a month, $0.50 per share each time. But note the fine print in the document—dividends are not guaranteed; they depend on secondary market price, Bitcoin volatility, and credit spreads. In short, dividends can be adjusted at any time. It also authorized $1 billion for repurchasing its own preferred shares and another $1 billion for repurchasing common shares. The most aggressive move: the board approved a $1.25 billion Bitcoin liquidation plan—only for supplementing cash reserves, not mandatory selling, but the authorization is a drawn sword.

Data from third-party institution Farside is even more straightforward. According to its calculator, under the assumptions of normal operations and perpetual dividends, the net present value per share of STRC is only $49.887. Meanwhile, the secondary market price was around $74, with a face value of $100. What does this valuation indicate? The market is already pricing STRC as junk debt, not "stable income" by any means.

Now look at the BTC backdrop. On July 8, Bitcoin was quoted at around $62,000, with a market cap of $1.24 trillion. But Strategy's average cost for its 847k BTC is $75,651. The current market price is more than 15% below cost. Although it hasn't been forced to sell, the reserve policy, additional issuance, and liquidation clauses are all tied to this loss-making foundation.

Currently, the market has two views on the subsequent trend. First: Risk is limited to Strategy itself. STRC's discount gradually narrows, cash reserves are sufficient, Bitcoin liquidation is only a backup plan, Strive's loss is one-time, and other companies are unaffected.

Second: Systemic contagion. STRC remains deeply discounted for a long time—even a 10% dividend can't restore confidence; Strategy is forced to survive by issuing more common shares, or even really selling some BTC to replenish cash; meanwhile, Strive's SATA also collapses, turning the entire preferred share track into high-risk junk assets.

Existing documents don't yet prove the second scenario has occurred, but Strive's $7.08 million loss is like a wake-up call: cross-holdings directly turn Strategy's discount into another company's financial disaster. Watch three indicators going forward: whether the discounts on STRC and SATA relative to face value widen, whether dividend cash is reliable, and whether Bitcoin selling shifts from authorization to execution. Strive's next financial report will be the first milestone for judging credit risk across the entire industry.

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