Bitcoin-linked preferred stocks STRC and SATA have entered the spotlight after Strive CEO Matt Cole projected a $3 trillion digital credit market tied to Bitcoin income products.
Summary
- Strive CEO Matt Cole said STRC and SATA could help create a $3 trillion digital credit market tied to Bitcoin.
- Strive recently bought 759 BTC using funds raised through SATA, a preferred stock offering a 13% annualized dividend.
- CryptoQuant warned Strategy may need $2.8 billion in cash reserves as STRC continues trading below its $100 par value.
Speaking during an interview, Cole argued that digital credit products such as Strive’s SATA and Strategy’s STRC could attract a large pool of income-focused investors seeking Bitcoin exposure through yield-generating securities.
According to Cole, the global credit market is worth nearly $300 trillion, creating a substantial opportunity if Bitcoin-backed credit instruments gain wider adoption.
Drawing a direct link between digital credit and Bitcoin demand, Cole said a 1% share of the credit market would represent roughly $3 trillion in capital. He added that such growth could support a long-term Bitcoin price of $1 million.
While he expects spot Bitcoin exchange-traded funds to continue expanding, Cole said the demand for income-producing products tied to Bitcoin remains largely untapped.
The comments echo a recent statement from Strategy Executive Chairman Michael Saylor, who described digital credit as a source of income for investors who believe in Bitcoin.
In a June 24 X post, Saylor wrote that “Digital Credit is income for investors who believe in Bitcoin,” while highlighting the yield profile of Strategy’s preferred securities.
Preferred stock products are becoming Bitcoin funding tools
Data shared by Saylor compared Strategy’s preferred offerings, including STRD, STRK, and STRC, against traditional income products. According to the chart, the effective yields on Strategy’s securities exceeded those of several established credit benchmarks, including the SPDR Bloomberg High Yield Bond ETF and preferred stock-focused funds.
The growing focus on preferred shares comes as both Strategy and Strive increasingly rely on such products to finance Bitcoin acquisitions. Last week, Strive purchased 759 Bitcoin for approximately $50 million, recording its largest weekly acquisition in months and surpassing Strategy’s latest purchase.
According to the company, a significant portion of that buying activity was funded through its Variable Rate Series A Perpetual Preferred Stock program, known as SATA.
SATA currently offers a Bitcoin-linked dividend calculated daily at an annualized rate of 13%, providing investors with income while helping fund the firm’s treasury strategy.
Cole said he expects more digital credit products similar to SATA and STRC to emerge globally as investor demand develops.
Pressure builds as STRC trades below par value
Despite enthusiasm around the model, recent trading activity has highlighted some of its challenges. SATA changed hands at $96.15 in premarket trading on Wednesday after closing 2.9% lower at $94.50, while STRC closed Tuesday down 1.67% at $87.31 after recovering from a recent low of $82.53.
Among those backing STRC publicly, Strategy President and CEO Phong Le disclosed on June 22 that he had purchased $1 million worth of the preferred stock. Le said he intends to hold the position until it returns to its intended $100 par value and may continue holding it beyond that level.
His purchase came as STRC occupies a critical role in Strategy’s Bitcoin acquisition framework. When the preferred stock trades above its $100 par value, the company can issue additional shares through its at-the-market program and use the proceeds to buy Bitcoin. Trading below par reduces the effectiveness of that funding channel.
Separate concerns have also emerged around the strategy’s balance sheet. Earlier on June 24, CryptoQuant warned that the company should consider pausing Bitcoin purchases and rebuilding its cash reserves as pressure grows around its preferred stock structure.
According to the analytics firm, restoring 24 months of cash coverage would require roughly $2.8 billion in reserves, about twice the amount Strategy currently holds after its latest increase.
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