On February 1, 2026, Michael Saylor, Executive Chairman of Strategy (formerly MicroStrategy), announced a 25 basis point increase in the dividend rate of its STRC (Stretch) perpetual preferred stock, raising it to 11.25% annually for the month of February. This decision marks the sixth consecutive increase since STRC’s launch in July 2025 and comes amid heightened tension in the Bitcoin market.
A Preferred Stock Under Pressure
The dividend increase comes at a critical moment: STRC is currently trading at $98.99, slightly below its par value of $100. This price level reflects a deterioration in market sentiment toward Bitcoin-linked credit products, in an environment where the cryptocurrency has fallen below important psychological thresholds.
On Friday, January 31, Bitcoin briefly plunged below $76,000, even reaching $75,500 according to some sources. This drop temporarily placed Strategy in negative territory on its overall Bitcoin holdings. The company currently holds 712,647 BTC, acquired at an average cost of $76,037 per unit, for a total investment value of approximately $54.2 billion.
The STRC Mechanism: A High-Yield Savings Account
STRC, launched in July 2025, positions itself as a short-term, high-yield credit product. Unlike MSTR common stock, this perpetual preferred stock offers several distinctive features:
- Variable dividend structure: The dividend rate is adjusted monthly by Strategy’s board of directors. The stated objective is to maintain the trading price close to $100 and limit volatility.
- Monthly cash payments: Unlike other Strategy preferred stocks (STRK, STRF, STRD) that pay quarterly dividends, STRC distributes its payments each month, on the last calendar day.
- Dividend reserve: Strategy has established a reserve of $2.25 billion to cover dividend obligations across all its perpetual preferred stocks, with an annual total of approximately $887 million.
History of Increases: An Upward Trajectory
Since its introduction in July 2025, STRC has experienced steady progression in its dividend rate:
- August 2025: 9.00% (initial rate)
- September 2025: 10.00%
- October 2025: 10.25%
- November 2025: 10.50%
- December 2025: 10.75%
- January 2026: 11.00%
- February 2026: 11.25%
This systematic progression illustrates Strategy’s approach to maintaining the instrument’s attractiveness in the face of Bitcoin volatility and changing market conditions.
The Perfect Storm: Bitcoin Under Pressure
Late January 2026 marked a critical turning point for Strategy. On January 31, Bitcoin dropped 6.53%, closing at approximately $78,719. This decline placed Strategy in an unprecedented situation since October 2023: for the first time in over two years, the valuation of its Bitcoin holdings fell below the average acquisition cost.
Several factors explain STRC’s current discount relative to its par value:
- Post-dividend adjustment: Historically, STRC tends to drop about 2% immediately after its ex-dividend date, before recovering within a few trading days.
- Negative sentiment on Bitcoin: Bitcoin’s fall below Strategy’s cost basis has created concerns about the company’s ability to maintain high dividends.
- Structural concerns: Sophisticated investors question the sustainability of a model that pays 11.25% dividends backed by a volatile asset that generates no intrinsic income.
- Liquidity risks: While Strategy maintains it has sufficient reserves, the market remains skeptical.
Strategy’s Business Model: Innovation or Risk?
Michael Saylor’s financial model is based on a bold strategy: transforming Strategy into a « Bitcoin treasury company » that raises capital through various financial instruments to purchase and hold Bitcoin long-term.
Strategy has created a complex capital structure with multiple classes of securities: MSTR common stock, and several preferred stocks (STRK at 8%, STRF at 10%, STRD at 10%, STRC at 11.25%, and STRE denominated in euros at 10%).
The operating model functions according to a relatively simple but potentially fragile cycle: issuing securities, purchasing Bitcoin with raised funds, paying dividends financed primarily by new share issuances, and expected Bitcoin appreciation to justify the costs.
$4.2 Billion ATM Program: Sword of Damocles?
On July 31, 2025, Strategy announced a $4.2 billion at-the-market (ATM) program for STRC. This mechanism allows the company to gradually issue STRC shares based on market conditions.
In January 2026, STRC experienced unprecedented activity. Between January 9 and 16, weekly volume surged 53.7%. On January 14, STRC recorded a transaction volume of $175 million, with prices temporarily exceeding $100.
Major Structural Risks
STRC’s Achilles heel lies in its total dependence on Bitcoin. If Bitcoin experiences a prolonged decline, Strategy could find itself in a downward spiral: falling STRC price forcing dividend increases, rising financial obligations, need to sell more shares or liquidate Bitcoin, which could pressure the market.
Unlike traditional bonds, STRC is not collateralized by specific assets. As a perpetual instrument with no maturity, STRC is extremely sensitive to interest rate variations. Moreover, Strategy has become structurally dependent on continuous securities issuances to finance its dividend obligations.
Arguments For and Against
For the Bulls:
- Attractive 11.25% yield, superior to most corporate bonds
- Tax advantages through « return of capital » structure
- Indirect Bitcoin exposure for institutional investors
- $2.25 billion dividend reserves offering several years of coverage
For the Bears:
- Persistent trading below par value signaling lack of confidence
- Potentially defensive dividend increases
- Extreme correlation with Bitcoin without direct holding benefits
- Structural complexity creating difficult-to-assess risks
Catalysts to Watch
Bullish catalysts: A Bitcoin recovery above $100,000 would strengthen confidence in the model. Increased institutional adoption and price stabilization around $100 would fully unlock the ATM program.
Bearish catalysts: A prolonged Bitcoin fall below $70,000 would put considerable pressure on the business model. Regulatory failure or credit rating degradation could trigger massive selling. Excessive dilution could reach a market saturation point.
Conclusion: A Fascinating Financial Experiment
Strategy’s increase of the STRC dividend to 11.25% represents both bold innovation and an alarm signal for financial markets. Michael Saylor has created a unique financial ecosystem allowing traditional investors to access Bitcoin through regulated instruments offering attractive returns. However, the model relies on fragile assumptions regarding Bitcoin’s continued appreciation and the ability to perpetually issue new securities.
The fact that STRC currently trades below its par value, despite an 11.25% yield, reveals deep market skepticism about the model’s sustainability. Investors clearly consider the risk currently exceeds the return, particularly in a context where Bitcoin itself is testing critical levels.
Ultimately, Strategy and STRC embody a fascinating financial experiment: can one truly create a stable « high-yield savings account » backed by the most volatile asset in financial markets? The coming months will provide critical answers as Bitcoin and crypto markets navigate a period of turbulence.
