There are two ways to get more Bitcoin:

  1. Buy Bitcoin.
  2. Build a machine that buys Bitcoin for you—over and over—by pulling capital out of the old world and converting it into satoshis.

That second thing is what Strategy (formerly MicroStrategy) has been trying to industrialize since its 2020 pivot into a Bitcoin-treasury-first company. 

And the “machine” isn’t just MSTR (the common stock). The real leap is the two-gear system:

  • MSTR = the high-voltage, high-beta equity engine.
  • STRC (“Stretch”) = the stabilizing credit gear that keeps the turbine spinning—even when equity is messy.

Together, they form a capital stack designed to do one thing at scale: turn market demand into Bitcoin accumulation. 

First, what are MSTR and STRC in plain English?

MSTR: the Bitcoin equity bazooka

MSTR is Strategy’s Class A common stock—the headline instrument that trades like a levered, narrative-charged proxy for BTC. When Bitcoin moves, MSTR tends to move with it (often harder), because markets price it as a Bitcoin-treasury vehicle, not a boring software company. 

STRC: “Stretch,” the yield gear

STRC is Strategy’s Variable Rate Series A Perpetual Stretch Preferred Stock, listed on Nasdaq. It’s explicitly positioned as “short duration high yield credit.” 

Key design choices (this is the magic):

  • Pays cash dividends monthly (current variable annualized rate shown as 11.00% on Strategy’s own STRC page as of January 2026).  
  • Dividend rate is adjusted monthly with the stated goal of encouraging the price to trade around $100 par and “strip away price volatility.”  
  • It’s meant to feel more like a “credit” instrument than a moonshot equity ticket—so it can attract a totally different crowd than MSTR.  

Think of it like this:

MSTR sells the dream. STRC sells the yield.

Both sell access—and the proceeds get turned into Bitcoin.

The flywheel: how the machine actually feeds itself

A flywheel works when every rotation makes the next rotation easier.

Strategy’s flywheel is basically:

  1. Issue securities (MSTR equity + STRC preferred) via at-the-market programs.
  2. Raise dollars from public markets.
  3. Convert dollars into Bitcoin.
  4. Bitcoin balance grows, increasing the company’s “Bitcoin gravity” (attention, liquidity, index relevance, product demand).
  5. That increased gravity makes it easier to issue again.
  6. Repeat until your keyboard melts.

This isn’t a metaphor. The company literally documents it in SEC filings.

The flywheel in the wild (real numbers, real cycle)

In the period Jan 12–19, 2026, Strategy reported that it sold:

  • 10,399,650 shares of MSTR for $1,827.3 million net proceeds, and
  • 2,945,371 shares of STRC for $294.3 million net proceeds,
    plus a small amount of another preferred (STRK). Total net proceeds were $2,125.0 million.  

Then it used that capital to acquire:

  • 22,305 BTC for $2,125.3 million at an average price of $95,284 per BTC.  

And as of Jan 19, 2026, Strategy reported total holdings of:

  • 709,715 BTC (aggregate purchase price $53.92B, average purchase price $75,979).  

That’s the mechanism, in one loop: capital markets → issuance → BTC → bigger balance sheet → more issuance capacity.

Why STRC supercharges the system

If MSTR is the engine, STRC is the gearbox that lets the machine keep torque under different conditions.

1) STRC monetizes a different investor emotion: “I want income.”

A huge chunk of global capital doesn’t want volatility. It wants cash flow. STRC is built to speak that language: monthly dividend, par anchoring, adjustable rate. 

So now Strategy can sell Bitcoin exposure in two formats:

  • Equity format (MSTR): “I want upside and I can handle chaos.”
  • Credit-ish format (STRC): “Pay me monthly and keep the price near par.”

That’s not just clever. That’s market segmentation—turning Bitcoin into multiple products for multiple tribes.

2) STRC is engineered to be “issuable” more often

Strategy explicitly says STRC’s rate is adjusted monthly to encourage trading around $100 par and reduce volatility. That’s basically:

“Let’s keep this thing stable so it stays usable as a capital-raising pipe.” 

When equity markets are risk-off and MSTR is getting punched, having a more “credit-like” instrument can help keep the funding door open (or reopen it sooner).

3) It creates a 

two-sided

 narrative: growth + income

Pure BTC exposure doesn’t yield. Bitcoin doesn’t send coupons.

So STRC is Strategy’s answer to the common objection:

“Cool story. Where does the cash come from?”

STRC says: the cash comes from the structure—from how Strategy slices and sells exposure to its balance sheet. 

The uncomfortable truth: flywheels also have failure modes

If you’re going to call this “ultimate,” you also have to stare straight at the fragility points.

1) Dividends are real obligations

STRC pays cash dividends monthly—but Strategy’s own materials warn that dividends are not guaranteed and rates can change. 

To address this, Strategy disclosed it created a $1.44B USD reserve (as of Dec 1, 2025) intended to support payment of dividends on preferred stock and interest on debt, with an intention to maintain at least 12 months of coverage (and target 24+ months over time). 

That’s a serious move—because the moment markets doubt dividend coverage, the “credit gear” can start slipping.

2) STRC is not literally “Bitcoin-collateralized”

Strategy’s own disclosures emphasize an important point: its preferred securities are not collateralized by the company’s bitcoin holdings—they have a preferred claim on residual assets, but not a direct Bitcoin lien. 

That matters if things ever get stressed.

3) The flywheel is strongest when capital is cheap and markets are receptive

Strategy openly describes its model as using proceeds from equity and debt financings to accumulate Bitcoin and offer investors a range of securities with varying exposure. 

But capital markets don’t stay friendly forever. If demand dries up, if the premium collapses, or if refinancing becomes expensive, the machine doesn’t “auto-win.” It becomes a financing problem.

So why do people call it a “Bitcoin flywheel” at all?

Because it’s not just “we own Bitcoin.”

It’s:

we built a multi-instrument capital pipeline that can repeatedly transform investor demand into Bitcoin purchases. 

And with STRC added into the mix, Strategy isn’t only selling a single bet (equity volatility). It’s selling a whole menu:

  • rocket fuel (MSTR)
  • yield gear (STRC)
  • and other preferreds in the broader stack (mentioned in the company’s own materials)  

That’s why this is such a uniquely aggressive Bitcoin vehicle: it attempts to financialize the balance sheet itself into a Bitcoin accumulation engine.

The one-line mental model

MSTR + STRC = two pipes into the same reservoir.

One pipe is hype-driven equity demand. The other is yield-driven credit demand.

Both pour into Bitcoin.

Bitcoin makes the reservoir bigger.

A bigger reservoir makes the pipes easier to sell.

Repeat.

That’s the flywheel.