At a certain point, Strategy investors might start asking themselves what the difference is between STRC and just buying bitcoin (BTC) on a credit card.
Michael Saylor has called STRC his company’s “greatest feat of financial engineering to date,” but its costs keep getting worse. Indeed, its dividend obligations have increased 27% since July, worsening every month since issuance.
Saylor is sticking to the belief that BTC will somehow rally 30% a year for at least a decade to pay for everything, even though it definitely hasn’t since 2021. Fixated on that number as an imaginary cushion, Saylor has casually hiked STRC’s monthly interest rates toward something that looks more like paying off a credit card than responsibly raising capital for long-term investing.
STRC is a perpetual dividend-paying preferred stock and the company’s self-proclaimed “iPhone moment.”
When the company sells STRC to investors, it funds BTC purchases for Strategy in exchange for monthly dividend payments at an interest rate about 60% the rate of the average US credit card.
On average, US consumers pay about 18.7% to 19.6% APR to service their credit card balance, depending on the poll. Strategy now pays STRC holders 11.5%, or about 60% of that rate, just to keep STRC near its quasi-peg or “par” value of $100 per share.
When STRC launched last July, it offered generous 9% annual dividends, and Saylor’s dubious promise of bank account-like stability.
After STRC fell to $90.52 in November, and again to $93.10 in February, Saylor paid up to guarantee his “iPhone moment” wouldn’t flop.
Incredibly, Strategy has hiked STRC’s dividend seven times since launch.
Read more: Strategy manager wrong about BTC backing STRC
‘Low volatility’ needed a bailout from volatility
Strategy’s cumulative 250 basis point increase since launch has worked, at least temporarily. The rapid and dramatic dividend hikes have bailed out STRC from its downside volatility.
This week, Saylor boasted about STRC trading in a tight intraday range near $100. He then retweeted a Strategy employee calling STRC “the most creative financial instrument in today’s capital markets.”
On the back end, that creativity carries a price tag. Strategy’s total annual dividend obligations now exceed $900 million.
Moreover, the company is under considerable pressure. It’s reported a $12.4 billion net loss for Q4 2025 and its common stock, MSTR, has declined 8% year-to-date, 54% over the past 12 months, and 74% from its November 2024 high.
Worse, the company’s entire BTC-buying operation has lost money since inception. BTC is worth less than Strategy’s average purchase cost of $75,985 per coin, and the company would have fewer losses if it had never bought BTC in the first place.
Moreover, the company’s premium to its BTC holdings has collapsed entirely.
At 11.5% and rising, the question is probably not whether STRC can trade at its $100 par, but how much Strategy can afford to pay to keep it trading there.
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