Strive Just Put $50 Million of Its Treasury Into Strategy’s Preferred Stock
Strive is using a third of its corporate cash to buy yield-bearing instruments backed by the world’s largest Bitcoin holder, while simultaneously increasing the dividend on its own Bitcoin-linked preferred stock.
The Trade and Why It Makes Sense
Strive deployed $50 million to purchase 500,000 shares of Strategy’s Variable Rate Series A Perpetual Stretch Preferred Stock, ticker STRC, at an 11.5% annualized dividend yield paid monthly in cash. The capital came from what CEO Matt Cole described as idle cash previously sitting in low-yield money market funds. Moving $50 million from money market rates of roughly 4% to STRC’s 11.5% generates approximately $3.75 million in additional annual income on the same capital.
The second function of the purchase is structural. The STRC holding extends the dividend reserve runway for Strive’s own SATA preferred stock to 18 months, composed of 12 months in cash and cash equivalents and 6 months backed by the STRC position. That runway extension allows Strive to raise the SATA dividend rate from its prior level to 12.75% per annum simultaneously with the STRC purchase, a move that would have been financially riskier without the extended reserve buffer behind it.
The logic is layered deliberately. Buy STRC at 11.5% yield. Use the income to fund SATA dividends at 12.75%. The spread between what Strive earns on STRC and what it pays on SATA is negative on paper, but the Bitcoin treasury appreciation Strive expects over the same period is the instrument through which that gap closes. The structure only works if Bitcoin goes up. Strive’s entire business model is a bet that it will.
STRC’s Market Performance
Strategy’s STRC recorded $409 million in daily trading volume on March 10, a single-day record for the instrument. Its 30-day volatility has dropped to a historic low of 3%, which is remarkably stable for a preferred stock tied to a company whose primary asset is Bitcoin. The combination of high yield, monthly cash payments, and low recent volatility has attracted institutional buyers beyond Strive. Anchorage Digital, Prevalon Energy, and OranjeBTC have all incorporated STRC into their corporate treasury positions.
The institutional adoption of Strategy’s preferred stock instruments as a treasury asset represents a second-order effect of the Bitcoin treasury company model. Strategy issues preferred stock to fund Bitcoin purchases. Other companies buy that preferred stock as a yield-generating treasury instrument. The capital raised funds more Bitcoin purchases. The Bitcoin appreciation increases the collateral value supporting the preferred stock. The cycle compounds as long as Bitcoin price holds or rises.
Strive’s Current Balance Sheet
Following the STRC purchase, Strive holds 13,311 BTC valued at approximately $930 million, $143.4 million in cash and cash equivalents prior to the $50 million deployment, and now a $50 million STRC position generating 11.5% annual yield in monthly cash payments. The company expects to be fully debt-free from the Semler Scientific acquisition by April 2026.
A company that passed Tesla on the Bitcoin treasury leaderboard this morning and deployed $50 million into Strategy preferred stock this afternoon is moving faster than most observers anticipated when Strive announced its Bitcoin treasury pivot.
The post Strive Just Put $50 Million of Its Treasury Into Strategy’s Preferred Stock appeared first on ETHNews.
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