Bitcoin Treasury Firm Strategy Keeps STRC Dividend at 12%

Crypto News

Strategy, the corporate Bitcoin (BTC) treasury firm behind the STRC preferred stock, left the instrument's dividend at 12% for August, according to the company's official disclosure. The decision keeps the payout at its current all-time-high level even though STRC closed July 31 at $89.46, still well below its $100 par value. Executive Chairman Michael Saylor and Chief Executive Officer Phong Le have signaled that the company wants STRC to trade between $99 and $100 over time, but they did not apply another dividend increase this month. That breaks with a recent pattern. On July 1, Strategy raised the rate by 50 basis points after STRC slid as low as $71 in June. The earlier increase, together with limited Bitcoin sales to fund distributions and a steadier price in the underlying asset, helped the shares recover to the high-$80s. Even so, the preferred stock remains discounted, and the company is under no obligation to lift the rate again. The August decision tests whether a 12% yield is enough to restore confidence in a vehicle designed to support Bitcoin accumulation. Investors had priced in a possible half-point increase because the ratchet-style policy previously responded to sustained discounts. By holding steady, Strategy preserves cash flexibility while leaving the burden on market demand rather than a richer coupon.

Unlike algorithmic-stablecoins, STRC's dividend policy is built around a one-way ratchet: when the shares trade below $95, the rate can rise by 0.5%, and the increase does not reverse if the price later improves. Official filing materials describe monthly resets intended to push STRC back toward $100 and reduce volatility, while supporting at-the-market share sales that can raise fresh Bitcoin (BTC) buying power. That mechanism has not worked. STRC touched $71.25 in June and has not traded at par since mid-May, leaving it roughly 10% to 11% below face value despite the highest coupon available since the security's 2025 launch. Competitive pressure is adding to the discount. Strive's SATA preferred security offers about 13% with daily distributions and no debt, narrowing investor appetite for STRC. The weak price constrained new issuance through the at-the-market program, limiting one channel Strategy uses to increase its Bitcoin stack. Individual holders control roughly 83% of the preferred issue, equivalent to about $8.8 billion, a concentration analysts view as more prone to sharp selling during stress. The company has responded by building a liquidity buffer to cover about 26 months of dividend and interest obligations, and by authorizing $2 billion of preferred and common repurchases under a digital credit framework. Those moves are designed to reassure income investors, but they tie Strategy's financing capacity tightly to Bitcoin's trajectory.

Strategy's second-quarter results show the pressure Bitcoin's drawdown placed on the broader structure. The company reported an $8.22 billion loss, reversing a $10.02 billion profit from the same period a year earlier. The deficit came largely from an $8.32 billion digital-asset impairment after Bitcoin ended June roughly 40% lower year over year. Even during the decline, Strategy continued buying, increasing its holdings by 11% during the quarter to about 846,000 BTC. It later sold part of that position to meet preferred-stock obligations, leaving 843,775 BTC as of July 26, according to the company's earnings call. STRC's displayed value expanded from about $5.3 billion at the end of March to $10.5 billion by the end of June, and Strategy raised $7.53 billion through the first seven months of the year. Institutional participation increased, with holdings rising from $1.1 billion to $3.1 billion and ownership moving from 22% to 29%. Management set an informal Sept. 8 marker for STRC to return to $100, while acknowledging that the outcome depends on market demand. To support the preferred stock, Strategy increased dollar reserves to $3.75 billion from $871 million and established a $1 billion preferred-share repurchase authorization. The reserve expansion gives the company room to fund distributions without asset sales, but it also converts more of Strategy's balance-sheet risk into a fixed cash obligation.

COINOTAG's analysis is that Strategy's preferred-stock structure turns Bitcoin volatility into a fixed-income problem. The company's investor-relations disclosures show higher reserves and buyback authority, but STRC still trades below par because the ratchet cannot force demand when the underlying asset is weak. COINOTAG's aggregate market data shows the Fear and Greed Index at 27, a fear reading, while Bitcoin accounts for 69.7% of our tracked market and the tracked universe is valued at $1,807,983,410,598. In that environment, income securities tied to Bitcoin can move more like a volatile altcoin than a stable coupon vehicle. No ai-trading-bot removes the refinancing risk embedded in that discount.