Bitcoin wheel spinning idle? MicroStrategy promotes preferred stock STRC, focusing on high dividends and low volatility

As Bitcoin prices continue to decline, the pioneer in Bitcoin reserve strategies, MicroStrategy, has also seen its stock drop. CEO Phong Le announced the issuance of a new perpetual preferred stock called “Stretch,” offering a floating dividend rate of up to 11.25% to attract conservative investors seeking digital asset exposure but worried about volatility. At the same time, this move reflects the company’s challenge to its previous model of issuing common stock at a premium to buy Bitcoin, as the premium has disappeared, forcing management to seek alternative financing channels to sustain its long-term holding strategy.

MicroStrategy’s Financing Transformation: Using High-Yield Preferred Stocks to Counteract Volatility Risks

The perpetual preferred stock product “Stretch,” ticker STRC, is a financial engineering response to changing capital market conditions. This instrument offers a current floating dividend rate of 11.25%, with a monthly reset mechanism designed to keep the face value near $100. The goal is to convert the highly volatile “digital capital” into a product resembling fixed income, soothing investors panicked by recent crypto market liquidations. Although currently a small part of recent financing, in an environment where common stock prices are highly volatile and the premium advantage has vanished, such defensive tools could become an important liquidity source for the company in the future.

Previously, Strategy announced that all preferred stock distributions paid in 2025 and the next ten years would be considered “Return of Capital” (ROC) under U.S. federal tax law. This means investors receive payments that are not immediately taxable dividends but a return of their investment cost. For Taiwanese investors, this addresses the long-standing issue of high withholding taxes on U.S. stocks, allowing the original 8% to 11% high annualized dividend yield to be fully received without being eroded by the 30% withholding tax.

(Investing in MicroStrategy preferred stock with a 10% high dividend yield allows Taiwanese investors to avoid the 30% dividend tax)

Asset Net Worth Under Pressure: Cryptocurrency Price Corrections and the Premium Model Challenge

The deteriorating macro market environment has significantly impacted Strategy’s financial structure. Bitcoin prices have fallen nearly 50% from their October 2025 peak, leading the company to record a net loss of up to $12.4 billion in Q4, mainly due to an unrealized impairment of $17.4 billion on its BTC holdings. More critically, the core “flywheel effect”—using stock price premiums relative to Bitcoin holdings to issue more shares and buy additional Bitcoin—appears increasingly difficult. As the premium has essentially disappeared and capital markets tighten, the company can no longer finance itself as cheaply through issuing common stock as before. While MicroStrategy’s holdings of over 710,000 Bitcoin are substantial assets, during the price decline cycle, they also become a heavy burden, suppressing stock prices and unrealized gains.

(MicroStrategy suffers a $17.4 billion loss on Bitcoin holdings; Saylor emphasizes HODL)

Michael Saylor Insists on Long-Term Holding, Denies Market Liquidation Concerns

Despite financial pressures, Executive Chairman Michael Saylor remains firmly bullish on Bitcoin and aims to stabilize market confidence. Addressing concerns that falling prices might force the company to sell holdings to cover debts or cut losses, Saylor emphasized that these worries are “baseless” and reaffirmed the company’s ongoing plan to buy Bitcoin every quarter.

However, market skepticism is reflected in the stock’s performance, which has fallen 18% this year. Investors are now highly focused on whether Strategy can rely solely on high-yield preferred stocks or debt instruments to support its large balance sheet over the long term without facing liquidity crises, especially in the absence of premium dividends.

This article, “Bitcoin’s Wind Turns? MicroStrategy Launches Preferred Stock STRC, Promoting High Dividends and Low Volatility,” first appeared on ABMedia, Chain News.