There is now $15 billion sitting in three securities marketed to bitcoin holders — Strategy's preferred stack STRC and SATA — and a new credit model suggests the structure is far riskier than most buyers realize. Roughly 82.7% of the buyer base is retail, meaning individual investors are shouldering the vast majority of a risk profile that includes a 50.7% probability of at least one forced bitcoin sale by the issuer during an eight-year cycle.
What STRC actually is
STRC is an unsecured, subordinated, perpetual preferred equity. It has no maturity date and no claim on any bitcoin. The dividend is discretionary — Strategy's board can cut it at any monthly meeting with no notice or shareholder vote. S&P rates the issuer itself B-, four notches into junk territory. The coupon has already moved monthly from 9% to 11.5%, embedding $268 million in permanent annual obligations.
The revenue math doesn't add up
Strategy's underlying software business produces roughly $477 million in annual revenue. Total preferred dividend obligations exceed $1.2 billion — a ratio of 3.5 to 1 relative to revenue. The funding gap is closed by issuing new STRC shares at or above par, or diluting common shareholders of MSTR. That's not a sustainable loop.
Credit model odds
Across 5,000 simulated bitcoin paths at a 10% compounding rate, the model shows a 12.3% probability of formal default, 21.9% probability of dividend deferral, and 50.7% probability of at least one forced bitcoin sale during an eight-year window. At a 15% compounding rate, STRC has a 44.6% probability of ending below $85 even on paths where bitcoin recovers to new highs. Of the $10.7 billion notional outstanding for STRC, roughly $8.8 billion belongs to retail bitcoin holders.
The next concrete event to watch: Strategy's monthly board meeting, where directors can decide to cut the dividend with zero notice. No date has been announced, but the math is tightening.
