Strategy Preferreds Plunge on Forced Liquidation as Bitcoin Holds Near $64K

Crypto News

High-yield preferred shares tied to two major Bitcoin treasury firms swung sharply before rebounding, reigniting concern over leverage in the bear-market backdrop. Strive chief executive Matt Cole said the move reflected a forced liquidation event rather than any deterioration in credit quality. Strategy’s STRC, engineered to trade near its $100 par value, sank to an intraday low of $82.53 before closing at $88.59, while Strive’s SATA fell to $92.88 and recovered to $97.71. Trading volume spiked, with STRC turnover near 10.6 million shares against a typical daily average around 3.6 million. Cole argued yield-chasing investors borrowing against the instruments triggered cascading margin calls.

The pressure on STRC compounds a broader strain on Strategy’s Bitcoin financing model. The perpetual share, which pays an 11.5% annual dividend held steady for a fourth consecutive month, has slid more than 10% over the past month to a record low beneath par. The design only functions while STRC trades near or above $100, allowing the firm to issue new shares and deploy proceeds into Bitcoin. With the stock roughly $11 below that threshold, each new issuance raises less cash. Strategy holds about 846,842 BTC, and analysts warn a forced dividend-rate increase could eventually push the company toward selling some of its holdings.

In a contrasting corporate story, Cincinnati Financial confirmed a sharp earnings turnaround alongside governance changes. The insurer reported first-quarter net income of $274 million, reversing a $90 million loss a year earlier, with earnings per share of $1.75 and non-GAAP operating income of $330 million. Its property-casualty combined ratio improved to 95.6% from 113.3%, while net written premiums rose 7% to $2.67 billion. The board expanded to 15 members, adding former US naval officer Lisa Franchetti as an independent director. A quarterly dividend of $0.94 per share keeps the firm on track toward a 66-year streak of annual dividend increases, payable July 15.

The crossover between crypto infrastructure and artificial intelligence sharpened as IREN completed its acquisition of Spain-based Nostrum Group, securing roughly 490MW of European AI data-center capacity. Shares rose about 3.2%, closing near $59.96 after touching $61.51 intraday, up roughly 472% from a 52-week low of $9.83. The deal accelerates IREN’s pivot from ASIC-based Bitcoin mining toward a vertically integrated AI platform spanning power, GPUs and hyperscaler clients. The European footprint adds to operations in Australia and Canada, advancing a targeted 6GW global power portfolio that underpins long-term contracts with large technology customers. Analysts now classify the company as an AI infrastructure growth play rather than a pure miner.

Institutional interest in stablecoin issuers persisted despite a weak share backdrop. Alberta Investment Management Corp, one of Canada’s largest institutional investors, disclosed a new $25.03 million position in Circle Internet Group, buying 315,600 shares of the USDC and Arc blockchain issuer. The purchase echoes earlier moves by other major funds, signaling sustained conviction in Circle’s regulatory positioning. The stock opened around $80.46, far below its 52-week high of $298.99, even as revenue grew 20% year over year. Sentiment remains mixed: Mizuho trimmed its price target to $85 from $135 while keeping a neutral rating, and the broader analyst consensus sits near $130.82.

Washington’s posture toward leading AI developers turned more assertive, with implications for valuations across the sector. The Commerce Department, under Secretary Howard Lutnick, ordered that foreign use of Anthropic’s latest Fable 5 and Mythos 5 models require government approval, an unprecedented extension of export controls to model usage itself. Anthropic immediately suspended access for affected users. President Donald Trump then struck a conciliatory tone, telling interviewers he no longer views the company as a national-security threat and praising its rapid compliance after meeting chief executive Dario Amodei at the G7 summit. The episode lands as Anthropic prepares an initial public offering reportedly valued above $900 billion.

Taken together, these developments trace a single arc: capital is rotating between leveraged crypto-treasury structures, AI infrastructure and regulated stablecoin issuers as macro conditions tighten. COINOTAG’s aggregate market data frames the caution, with the Fear and Greed Index at 23, signaling Extreme Fear, and Bitcoin holding near $64,000 while total crypto market capitalization sits around $1.82 trillion. Bitcoin dominance near 70.1% underscores how defensively positioned the market remains, concentrating value in the largest asset as altcoin risk appetite stays muted. With STRC trading well below par and a hawkish Federal Reserve in the backdrop, the read-through from Strategy’s funding mechanics to spot Bitcoin warrants close monitoring.