MicroStrategy Reassesses Its Bitcoin Financing Model: Market Signals Behind STRC and SATA Trading Below Par Value

On July 10, 2026, according to Gate market data, the price of Bitcoin (BTC) was $63,985.3, up 2.48% over the past 24 hours. It rose 0.72% over the past week and 2.46% over the past 30 days. However, when extending the timeline to one year, BTC is still down 45.66% versus the same period last year. This set of data captures the market’s core contradiction right now: a short-term rebound coexists with long-term pressure.

After undergoing a sharp adjustment in June—when the price briefly fell below $60,000—Bitcoin rebounded from a low of about $57,800 to near $64,000. But in its latest weekly report, on-chain analytics firm Glassnode said that Bitcoin has been trading for about five months below two key moving averages: the real market average of $76,600 and the short-term holder cost floor of $72,200. This means the current Bitcoin price is trading at a discount of about 16.5% to the real market average, and about 11.4% below the short-term holder cost line.

Against this macro backdrop, an emerging financial instrument is facing unprecedented stress testing: preferred shares issued by Bitcoin treasury companies.

Strategy (formerly MicroStrategy)’s floating-rate Series A perpetual preferred stock STRC, and Strive’s variable-rate Series A perpetual preferred stock SATA, both fell below their $100 issue par value in June 2026. STRC hit a June 26 intraday low of $73.62, and closed at $75.69—down more than 24% versus the $100 par value. SATA’s decline was relatively smaller: it touched a low of $92.88 in June. In early July, STRC was trading steadily around $85, while SATA rebounded to about $97.9.

This isn’t just a simple price fluctuation. It points to a deeper issue: when companies buy Bitcoin by issuing financial instruments, can this “Bitcoin treasury company” model continue to create value over long cycles?

STRC and SATA’s Price Discounts: The Combined Effect of Three Factors

To understand STRC and SATA’s price performance, it needs to be analyzed across three dimensions.

Bitcoin price volatility directly transmits.

STRC and SATA’s value proposition is built on the issuer company’s Bitcoin reserves. When Bitcoin dropped from above $80,000 in mid-May 2026 to below $60,000 in late June, investors’ confidence in the related instruments was hit directly. Strategy’s common stock MSTR fell below $100 intraday on June 25, bottoming at $92.5—its first move below that level since March 2024. The synchronized weakening of preferred shares and common stock shows that market concerns are no longer confined to Bitcoin’s price volatility itself, but instead are about whether the company can sustain its business model, which relies on preferred-share financing over the long term.

Tightening dividend coverage capability.

STRC’s dividends are rigid cash obligations and cannot be paid directly with the book value of Bitcoin market capitalization. Strategy’s annual preferred stock dividend commitment has surged from about $300 million at the start of 2026 to about $1.2 billion. Estimates differ across sources, and some analyses suggest annual dividend obligations may be close to $1.7 billion.

More importantly, cash reserves have changed. In the second quarter of 2026, Strategy repurchased $1.5 billion in convertible notes, causing the company’s cash balance to fall from about $2.25 billion to $871 million. Even though the company raised its U.S. dollar reserves to about $2.55 billion in early July, fluctuations in dividend coverage have already sparked market doubts about sustainability.

A chain reaction from leveraged capital.

About 80% of STRC is held by individual investors, many of whom use margin. When the share price fell below $90, forced liquidations accelerated the downside momentum, pushing the price further into the $70 range. This mechanism creates a reinforcing loop between price declines and forced liquidations—investors initially expected the $100 anchored price would hold, but once the price started falling, margin calls triggered automatic selling, amplifying downward pressure.

In addition, the dividend ratchet mechanism in the STRC contract adds extra pressure. When STRC trades below $95, the dividend rate increases by 0.5 percentage points each time. JPMorgan analyst Nikolaos Panigirtzoglou noted that each trigger adds about $53 million in annual obligations. This mechanism creates an asymmetry that traditional preferred stock lacks: typical preferred stock price declines increase effective yields for new buyers but do not increase the issuer’s costs; STRC has both effects.

Not Just a Price Issue: The Deeper Test of the Strategy Model

On July 6, 2026, Strategy made a decision that drew broad market attention: it sold 3,588 BTC worth about $216 million. This was the company’s first large-scale net sell since December 2022.

The sale was executed in two batches: from June 29 to 30, it sold 1,363 BTC at an average price of about $59,256, raising $80.8 million; from July 1 to 5, it sold 2,225 BTC at an average price of about $60,773, raising $135.2 million. The proceeds were mainly used to pay preferred-share-related obligations and to supplement U.S. dollar reserves.

For a company that has long sold a “never sell” narrative to the market, the action itself is symbolic. However, from a data perspective, the sale volume accounts for only about 0.4% of its total holdings. As of July 6, Strategy still held about 843,775 BTC and had about $2.55 billion in cash reserves. On July 8, CEO Phong Le disclosed that over the past three months, Strategy’s BTC holdings increased by 10%, and its BTC return year-to-date rose from 3.7% to 7.8%.

This means, in terms of holding size, Strategy has not changed its long-term Bitcoin strategy. But the financing-side pressure is real.

Strategy’s core financing model relies on issuing new STRC stock at par value or above par via a market issuance program, and using the proceeds to buy more Bitcoin. When STRC falls 24% below par, this channel has been temporarily paused. On June 29, the company released the “digital credit capital framework,” raising the annualized dividend on STRC to 12%, switching to two dividend payments per month, and authorizing a share repurchase plan of up to $1 billion. However, these measures have not immediately pushed the stock price back near par.

The core contradiction in this situation is: while raising the dividend rate increases attractiveness to new buyers, it also increases the company’s rigid cash obligations. Onramp CEO Michael Tanguma put it succinctly: “A capital structure that can endure volatility only by piling on permanent obligations is a structure with a finite number of cycles.”

Opportunities in the Discount: Reverse Selection by 52% of Investors

Another side of the market also deserves attention.

According to BitcoinTreasuries’ report, although STRC and SATA both fell sharply in June, more than half (52%) of the surveyed investors chose to buy when the price was below par value. The combined trading volume of the two preferred shares in June surpassed $10 billion, setting a monthly record. STRC’s trading volume reached $8.7 billion, while SATA was close to $1.5 billion—about twice the amount from May in digital terms.

Supporters’ logic is based on several considerations.

The long-term institutionalization trend for Bitcoin hasn’t changed. Despite a significant pullback in price, the expansion of corporate Bitcoin reserves continues. As of July 2, Japanese listed company Metaplanet held 43,000 BTC, ranking third globally among corporate Bitcoin holders. Hyperscale Data disclosed its reserves had exceeded 1,000 BTC. The trend of corporate allocations to Bitcoin is still spreading, not shrinking.

Preferred shares provide differentiated BTC exposure. Unlike directly buying Bitcoin, STRC and SATA do not track BTC price movement exactly; instead, they offer different payoff structures. Using STRC at a price of $85, with a coupon based on 11.5% of the $100 par value, the new buyer’s actual market yield rises to roughly 13% to 14%. SATA’s annualized yield is about 13%. For institutional investors seeking yield rather than pure price exposure to Bitcoin, these instruments fill a specific allocation need.

A structural adjustment, not a systemic collapse. Benchmark Equity Research maintains a Buy rating on Strategy, arguing that STRC’s decline is a market-driven necessary reset of yields rather than a structural failure. Bitwise, an asset management firm, also pointed out that STRC’s selloff is a sign that the crypto market cycle is maturing, not evidence that the company is about to enter a crisis.

Bitcoin Treasury Companies: The Next Wave of Institutional Investment Trends?

The discounts in STRC and SATA are not isolated events. They point to a broader industry trend: Bitcoin is evolving from a single tradable asset into the underlying asset of a more complex financial ecosystem.

In the past, investors had relatively limited ways to participate in the Bitcoin market—direct spot buying, or getting leveraged exposure via derivatives such as futures and options. Now, the menu of tools has expanded significantly: spot Bitcoin ETFs, stocks of Bitcoin mining companies, stocks of Bitcoin treasury companies, and yield-style preferred shares backed by Bitcoin reserves.

This financialization evolution is a natural path as the market matures. Each class of instrument has its own risk-return profile and attracts different types of capital. ETFs suit institutional funds seeking convenient allocations, mining company stocks provide indirect exposure to network hash power, and treasury-company preferred shares aim to find a balance between Bitcoin volatility and fixed-income demands.

But this evolution is not without costs. The discounts in STRC and SATA offer an important reminder: when the design of a financial instrument depends on specific market conditions (such as sustained Bitcoin upside and low financing costs), changes in those conditions transmit quickly into instrument pricing. Dividend ratchet mechanisms, the pro-cyclical nature of leveraged capital, and fluctuations in cash coverage collectively form the weak points of these instruments under stress conditions.

From a more macro perspective, whether the Bitcoin treasury company model can keep expanding depends on the long-term direction of three variables: whether Bitcoin price cycles allow companies to maintain financing ability during downturn phases; whether financing costs (especially preferred-share dividends) accumulate over multiple cycles into an unbearable burden; and whether the regulatory environment imposes additional compliance costs on these innovative structures.

Conclusion

As of July 10, 2026, STRC is trading around $85, while SATA is around $97.9. The magnitude of the discounts differs, reflecting the market’s differentiated pricing of two different capital structures, different reserve sizes, and different management models.

STRC and SATA trading below par value is not a termination signal for the Bitcoin treasury company model. But it does constitute the first system-wide stress test of this model since its large-scale rise. The outcome will not only affect the financing capacity of Strategy and Strive, but also provide important reference experience for later imitators—regarding capital structure design, the sustainability of dividend policies, and how to build a truly robust bridge between volatility assets and fixed-income commitments.

For market participants, whether the discount is an opportunity or a trap is not determined today—it depends on how Bitcoin’s price moves over the coming quarters, how company cash flows evolve, and how quickly investors’ risk preferences repair. The only certainty is that Bitcoin’s financialization process is continuing, and each stress test within this process is shaping the market structure for the next phase.

FAQ

Q: Why did STRC and SATA fall below the $100 par value?

Mainly due to the combined effect of three factors: Bitcoin retraced from above $80,000 to below $60,000, directly hitting investor confidence; Strategy’s cash reserves fell due to convertible note repurchases, leading the market to question the sustainability of dividends; and leveraged capital triggered forced liquidations when prices dropped, forming a self-reinforcing sell-pressure cycle.

Q: Does Strategy’s sale of Bitcoin mean its long-term strategy has changed?

At present, it does not. Selling 3,588 BTC (about $216 million) is only about 0.4% of its total holdings, mainly used to pay preferred-share dividend obligations and to replenish U.S. dollar reserves. As of July 6, the company still holds about 843,775 BTC, and its holdings increased by 10% over the past three months. This looks more like liquidity management than a strategic de-risking.

Q: What are the risk-return dynamics of investing in STRC or SATA at current prices?

Based on STRC at $85, with a coupon based on 11.5% of the $100 par value, the effective yield is already up to roughly 13% to 14%. If prices revert to par in the future, there is also about 17% upside in capital gains. The risks are: dividends are not guaranteed— the company can suspend dividend payments without triggering default; and the dividend ratchet mechanism will permanently increase the company’s obligations when prices stay below $95.

Q: Is the Bitcoin treasury company model sustainable?

Sustainability depends on three variables: whether Bitcoin price cycles allow companies to maintain financing ability during downturn phases; whether financing costs such as preferred-share dividends will accumulate over multiple cycles into an unbearable burden; and changes in the regulatory environment. The current discounts in STRC and SATA suggest the market is re-evaluating the risk-return profile of this model, but the expansion trend of corporate Bitcoin reserves is still continuing.

Q: How do institutional investors view the current discounts?

According to BitcoinTreasuries’ survey, 52% of the investors surveyed chose to buy when the price was below par value. Supporters argue that the long-term institutionalization trend for Bitcoin remains unchanged, preferred shares provide differentiated BTC exposure, and the current discount offers a higher effective yield. Some analysts, however, interpret the drop as a necessary market-driven reset of yields rather than a structural failure.