STRC (STRC)

Join us tomorrow as we discuss the outlook for STRC and MSTR. Both Gordon and I have strong views…

First time ever that $STRC traded UP on ex-dividend date, despite $BTC being DOWN. Winds of change are starting to blow

Peter Schiff is bringing attention to $STRC The issue is not just the dividend rate. What happens when $STRC is trading below par and Strategy has to step in and protect the confidence in the product. Strategy calls the new framework flexibility. Schiff sees $BTC sale pressure.

One no-brainer improvement for $STRC and $SATA (but it obviously won't be very useful in the near-term) is to let it float above $100, maybe to $110 STRC is trying to defy the laws of physics by having both a stable price and a quasi-stable yield (in the sense that the yield moves extremely slowly) while being backed by a very volatile asset This is something that can't work, and it results in increased volatility to the downside once BTC dumps, because the 'forced' ATM at $100 leads to the absorption of 'too much demand' at $100, and an inorganic increase of the market cap that happens too fast to get digested properly. The other problem with guaranteeing the ATM at $100 is that it offers a zero-downside short trade (except yield+funding but these are very low on a short timeframe), while at the same time capping the upside for holders (they only get the volatility to the downside). It's sub-optimal on a lot of levels except on getting levered quickly at the expense of future price instability.

STRC being green with BTC making new lows means he's probably selling Bitcoin today

Now comes the really boring part for $STRC. Bears go FUD something else, Bulls don't feel comfortable enough to shill it hard yet. So, it slowly grinds higher as people realize the sky isn't falling and double digit yield is available. How long this part takes, I don't know.

When $STRC crashed to 25% below par, it was certainly a setback for its credibility, but it wasn't proof that the model is broken. I would argue it was an important stress test for $MSTR, and one that it will definitely pass with flying colors.

【Bearish📉】 Peter Schiff says “$STRC’s 15% yield could force Strategy to raise dividends and sell more $BTC earlier #PeterSchiff” https://t.co/X2RhN4ou8f

There is no incentive for Saylor to buyback STRC at this level The SEC filing is all about signaling I strongly doubt he's going to repurchase STRC above $70, I don't even think he would do it above $50. If he's selling BTC to buy STRC, then the chart that should matter is STRC/BTC. I don't expect this chart to collapse so I don't think it would be interesting for him to buyback STRC STRC is now basically a STRF-like pref that is floating, bringing it back to $100 is not that important anymore (*as the issuer that is focusing on limiting damage and not issuing more in the short-term*) because no one believes it must trade at $100 anymore He will probably keep the dividend rate at 12%, which is a clean 1% for month, easy to remember. Everybody kind of agrees that it would be useless to try to increase it enough for the asset to trade back at par anyway, so there's no incentive to increase it either.