Finance, Strategy, Bitcoin, Money, Michael Saylor, News The offering doesn’t give investors direct bitcoin exposure, but rather uses the asset’s historical return profile to sustain high payouts.
Strategy (MSTR) is pulling off some form of financial alchemy: using bitcoin, historically a volatile asset, to create something that looks a lot like stability.
That’s the firm’s $2 billion “Stretch” Preferred Stock (STRC) offering offers a variable 9% dividend and is designed to keep the share price hovering near $100.
The offering doesn’t give investors direct bitcoin exposure, yet it’s backed by the asset in spirit and structure, according to a recent NYDIG report.
Strategy holds $71.7 billion in bitcoin and just $11 billion in liabilities, giving it room to deliver income even if crypto prices dip, the report notes.
Historically, bitcoin has returned at least 3%–4% annually over any five-year stretch, while average returns have been significantly higher.
Strategy is betting it can use this return profile to sustain high payouts without touching its crypto stash, essentially turning long-term bitcoin appreciation into monthly cash flow.
“STRC looks to us like a high-yield, bitcoin-backed, money-market-style vehicle, designed to trade near $100 par while offering a far higher yield than traditional short-term instruments, albeit with a different liquidity profile,” NYDIG wrote.
That premise has proven popular. Investor interest drove Strategy to quadruple the offering size from $500 million to $2 billion.
STRC may not just be a yield vehicle, but rather bitcoin, reworked for traditional finance income investors. A kind of money-market fund, remixed with crypto under the hood.
Read more: Michael Saylor Builds Out Own Yield Curve With Upsized Preferred Stock Sale
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