#STRCHitsAllTimeLow

STRC just hit an all-time low of $74, which's 26% below what it should be and the story behind this move is really concerning for every Bitcoin investor.

Let me explain what is happening with Strategys stock situation right now because this is more than just a price chart going down.

STRC, which is Strategys Variable Rate Series A Perpetual Stretch Preferred Stock went down to an all-time low of $74 yesterday. That is a 26% discount from its $100 value on an instrument that was supposed to stay near $100.

At the time MSTR common stock went below $87 which is its lowest level since February 2024 and it has gone down over 50% in just over a month.

Both of these numbers together show that the market thinks there is a problem, not just normal ups and downs.

The reason for this collapse is important to understand.

STRC was made to pay 11.50% in cash dividends to help Strategy buy more Bitcoin and it was supposed to stay near $100 because the dividend rate would go up if the price went down which would make buyers want to step in and stabilize it.

But that did not work and instead of stabilizing the price just kept going down as Bitcoin went toward $58,000.

What happened was a lot of people who had bought STRC with borrowed money started getting margin calls and that made them sell which made the price go down more.

Hedge funds also started betting against STRC, which made the price go down faster.

Each new low made more people get margin calls. That made them sell even more which created a cycle that took the stock from $100 to $74 in under three weeks.

The numbers that matter are that Strategy now has to pay about $1.2 billion in dividends every year and they have about $1.4 billion in cash which means they can pay dividends for 10 to 14 months before they need to either sell Bitcoin or issue new securities at low prices.

Strategy has 850,000 BTC, which is worth about $50 billion at $59,000 so they have a lot of Bitcoin.

If Bitcoin goes up a little they can pay dividends for a long time like 32 years according to Saylor.

The truth is, the market is not confident right now and that is why the yield on STRC is so high, about 15 to 16%, which is a sign of distress.

When investors want 15% to hold a security it means they think there is a risk of not getting paid or losing more money.

A 15% yield on a security that is supposed to be stable and is backed by a lot of Bitcoin is a signal that the market is not confident.

The next important date is June 30 when Strategy will pay dividends again and they may also change the dividend rate.

How management handles this crisis will determine if $74 is the bottom or just a stop on the way

Michael Saylor said that STRC is "income for investors who believe in Bitcoin" and at $74 the yield is 15.5%, which is a great income if you think Bitcoin will go up.

If Bitcoin goes down the problem will get worse.

This is not a trade so you need to know what you are getting into.

With STRC, at $74 and offering a 15.5% yield and Strategy holding 850,000 BTC do you think this is a time to buy or a sign that the whole system is breaking down?

#STRCHitsAllTimeLow #GateSquare #Bitcoin $BTC ‌