Mitigating Volatility: Digital Credit via $STRC
On the stable end of the barbell, Strategy creates “digital credit” through securities like $STRC (Variable Rate Series A Perpetual Stretch Preferred Stock, also called “Stretch”). This is a preferred stock designed to behave like a high-yield, low-volatility instrument, appealing to income-focused investors such as retirees, corporate treasuries, or those seeking alternatives to money market funds and CDs. 7 It’s structured with a dynamic dividend that resets monthly (currently around 9-11%), aiming to keep the share price pegged near $100 with minimal fluctuations—effectively stripping away much of BTC’s wild price swings while still providing indirect exposure through the company’s Bitcoin-backed treasury. 3 6 Proceeds from $STRC issuances (including a $2.5 billion IPO in July 2025 and a $4.2 billion at-the-market program) are used to acquire more Bitcoin, funding treasury growth without direct collateralization or forced selling risks. 0 5 9 As of recent data, Strategy holds over 717,000 BTC, acquired at an average cost of about $76,000 per coin, with $STRC contributing to this accumulation. 4
This side of the strategy “conserves volatility” by channeling it elsewhere, creating a BTC-linked asset that’s more like overcollateralized fixed income than crypto speculation. 11 For instance, during BTC drawdowns, $STRC has maintained a premium to its treasury value, proving its volatility-dampening design. 10
Amplifying Volatility: Digital Equity via $MSTR
On the high-risk end, Strategy amplifies BTC volatility through its common stock, $MSTR, which acts as “digital equity.” $MSTR provides leveraged exposure to Bitcoin—often 4-5x or more—due to the company’s debt and equity financing strategies that pile into BTC holdings. 2 10 Unlike $STRC’s yield-focused stability, $MSTR captures the full upside (and downside) of BTC price moves, trading at a premium to the net asset value of its Bitcoin treasury. This premium can expand during bull markets, creating reflexive loops: rising BTC boosts balance sheet strength, attracts more capital, enables more BTC purchases, and further amplifies $MSTR’s performance. 13 However, it also introduces risks like dilution from future issuances and higher interest costs on related instruments. 3
Saylor has framed this as conserving volatility “with the principles of thermodynamics,” where the energy (volatility) stripped from digital credit products like $STRC (and others such as $STRK, $STRF, $STRD) is redirected to fuel $MSTR’s growth potential. 11 14 It’s a way to offer investors tailored BTC exposure: steady yields for the cautious, amplified gains for the aggressive.
Overall, this barbell positions Strategy as a Bitcoin treasury powerhouse, turning BTC into a spectrum of “adjusted exposure” assets. 7 1 As of February 2026, with BTC holdings valued at around $48.5 billion, it’s a bold play that’s drawn both praise for innovation and scrutiny over leverage risks. 4