Strategy's STRC Preferred Stock Yields Increasing Correlation with Bitcoin

Strategy Inc.’s perpetual preferred stock, known as STRC, has witnessed its 90-day correlation with bitcoin surge to nearly 0.70. This indicates a tighter link than ever since the stock's debut in July 2025. Currently, STRC trades at $76, down 23% this month, while bitcoin has slid nearly 20% to below $60,000.

The increasing correlation undermines STRC's role as a relatively stable income asset, which was intended to provide some decoupling from the fluctuations of bitcoin. The 90-day correlation coefficient has been rising consistently, highlighting the deepening connection between the performance of STRC and bitcoin's price movements.

Investors are observing the implications of this correlation shift. Traditionally, STRC was designed as a hybrid product offering variable-rate dividends based on a $100 par value. Its current annualized rate stands at 11.5%, reflecting efforts to maintain its attractiveness. However, the recent fall below par value limits Strategy's ability to issue new shares that would fund further bitcoin purchases.

In a notable change of tactics, Strategy has begun making small bitcoin sales to meet dividend obligations, contradicting its previous strategy of avoiding bitcoin sales. This shift reflects a response to the adverse market conditions affecting both STRC and bitcoin. The sale of bitcoin could impact Strategy’s long-term accumulation strategy, which has historically defined its investment approach.

Market analysts express divided views on the implications of the current situation. Some suggest that the discounted price of STRC could be an appealing entry point for yield-focused investors, potentially leading to capital appreciation alongside dividends as market conditions improve. Others are cautious, warning that continued weakness could stress the capital framework, heighten reliance on existing reserves, or destabilize the growth trajectory built on bitcoin accumulation.

With both STRC and bitcoin instability, observers recommended watching this evolving landscape for potential future investments and understanding how this correlation might influence overall market sentiment among bitcoin and equity investors.