Strategy's STRC preferred shares dropped sharply this week amid falling Bitcoin prices and leveraged selling. The security, designed to trade near its $100 par value, reached an intraday low of $82.50 before rebounding slightly.
On June 18, STRC fell below $83 intraday and closed at $88.59. Bitcoin traded at $62,880 after declining from highs above $80,000 in May.
The decline followed a series of events. On May 15, Strategy repurchased $1.5 billion of convertible notes at an 8% discount, drawing down its cash reserve. Bitcoin prices continued to slide, reaching below $60,000 by June 5.
Strive CEO Matt Cole described the move as a leverage-driven liquidation. He said forced selling created a cascade disconnected from fundamentals.
The $10 billion digital credit market for Bitcoin-linked yield products showed vulnerability to margin pressure. Both STRC and SATA recovered from lows but highlighted risks of borrowed positions.
