STRC: What It Is, How It Works, Etc.

Strategy Inc. (formerly MicroStrategy, the company holding over 760,000 Bitcoin as of March 2026) created a financial instrument called STRC. It trades on Nasdaq like a regular stock. It pays 11.5% per year, deposited monthly, in cash. And it’s designed to trade near $100.

What It Actually Is

STRC is a preferred stock. That’s a type of security that sits between bonds and common stock. You don’t get voting rights. You don’t participate in the upside if the company’s stock price runs up. What you get is a regular income payment (called a dividend), and you get it before common shareholders see anything. If the company ever runs into trouble, preferred holders also get paid before common shareholders in the pecking order.

If you come from crypto: think of it as a yield bearing instrument issued by a company whose main asset is Bitcoin.

If you come from traditional finance: it’s a variable rate perpetual preferred with a par targeting mechanism. No maturity date, meaning it never expires. Cumulative dividends, meaning if they miss a payment, they still owe you. Board adjusted rate. Sits above common equity in the capital structure, below convertible bonds and senior debt.

Either way, the basic idea is the same. You buy it near $100, collect monthly income, and the instrument is built to stay near $100.

How It Stays at $100

To understand this, you need to know one thing about how most preferred stocks work. They have a fixed dividend rate. If market conditions change and investors start demanding a higher return, the price of the stock has to drop so that the fixed payment represents a bigger yield relative to the lower price. That’s just math.

STRC inverts that. Instead of letting the price drop, Strategy adjusts the rate.

If STRC dips below $100, the board raises the dividend rate. Higher yield attracts more buyers, which pushes the price back up. If STRC trades above $100, they lower the rate or sell more shares through what’s called an ATM (at the market) program, which is a way of gradually issuing new shares into the open market. That brings the price back down.

Think of it as a thermostat. $100 is the target temperature. The dividend rate is the dial. Strategy keeps adjusting the dial to hold the temperature steady.

This is not a hard guarantee. It’s not a fixed peg like a stablecoin. It’s a mechanism, driven by board decisions and market dynamics. Since launching in July 2025 at a 9% rate, the board has raised the dividend seven consecutive times to reach the current 11.5%. The mechanism has been tested and so far it’s held.

Where The Money Comes From

This is where most people’s mental model breaks, because Strategy doesn’t pay STRC dividends from business revenue. Their software business still generates revenue, but it’s small relative to the scale of preferred obligations we’re talking about here. So where does the cash come from?

Here’s how it works:

Strategy’s common stock (ticker: MSTR) trades at a premium to the Bitcoin it holds. That means the total market value of MSTR shares is higher than the dollar value of the Bitcoin on the company’s balance sheet. Investors are willing to pay more because MSTR gives them leveraged exposure to Bitcoin without having to manage custody or leverage themselves.

Strategy takes advantage of this premium by selling new MSTR shares into the market through ATM programs. Cash comes in. That cash goes into a USD Reserve, a pool of dollars specifically set aside for paying dividends and servicing debt. The reserve funds STRC dividends.

So the dynamic is: common shareholders accept dilution (their ownership stake gets smaller each time new shares are sold) and volatility. Preferred shareholders get stability and yield.

The reserve holds about $2.25 billion as of early 2026. With total annual preferred dividend obligations now exceeding $1 billion (up from ~$614 million at the time of the IPO, as Strategy has continued issuing new preferred series), that reserve covers roughly two years of payments if Strategy stopped raising capital entirely.

There’s also a metric called BTC dividend coverage, which measures how long they could theoretically sustain payments from their Bitcoin holdings alone. At current prices it runs over 50 years. That number assumes Bitcoin stays near current levels, which is obviously a big assumption, but it gives a sense of the scale of the Bitcoin position relative to the dividend obligations.

Why It Held Up When Bitcoin Crashed

Early 2026. Bitcoin drops about 50% from its highs. MSTR common stock falls nearly 70%, marking eight consecutive months of declines. Everything connected to Bitcoin reprices aggressively.

STRC dipped to the high $80s at its lowest point, roughly a 10-12% drawdown from par. Compared to what happened to MSTR and Bitcoin itself, that’s a dramatically smaller move. It then recovered toward $100 as the dividend mechanism kicked in.

To understand why, you need to understand the capital stack. That’s the hierarchy of who gets paid first when a company distributes money, and more importantly, who takes losses first when things go bad. Here’s how it works at Strategy:

Senior debt gets paid first. Then STRF (another preferred stock, senior to STRC). Then STRC. Then other preferreds like STRK and STRD. And last in line, MSTR common stock, which absorbs all the impact before anyone above it feels a thing.

Common equity acts as the shock absorber. When Bitcoin’s price drops, the loss in value hits MSTR shareholders first. It has to destroy a massive amount of value before the damage even begins to reach STRC. As of mid 2025, the Bitcoin surplus above all debt and preferred obligations was roughly $60 billion. That cushion has shrunk since then (with BTC around $70K and more preferred issuance, it’s now closer to $35 billion), but it’s still substantial.

The Numbers

Put $10,000 in. That’s 100 shares at $100 each (that $100 price is called “par value,” the target price the instrument is designed to trade near).

You earn about $1,150 per year. Roughly $96 per month, deposited in cash. The price is designed to sit around $100. You’re not buying this for the price to go up. You’re buying it for the steady income.

For comparison: money market funds pay around 4.2%. Treasury bills, about 4.3%. A savings account, maybe 4% if you negotiated a good rate. STRC pays 11.5%.

There’s also a tax consideration worth mentioning. STRC distributions have been classified as Return of Capital rather than ordinary income. In simple terms, that means a portion of what you receive isn’t immediately taxed as income. Instead, it reduces your cost basis, and you only pay tax on it later when you sell. For certain holders, that effectively makes the after tax return even higher compared to alternatives.

Some context on the instrument’s scale: the IPO in July 2025 raised $2.5 billion, making it the largest U.S. IPO that year. Total notional outstanding is now around $5 billion as of mid-March 2026, and growing as Strategy continues selling shares through its ATM program. Daily trading volume runs near $300 million. Liquidity is not a concern.

The Risks

The yield is high because the risks are real. The funding model has a breaking point. This is probably the risk most worth understanding, because it’s structural.

STRC works because Strategy can sell MSTR equity at a premium and use the proceeds to pay dividends. But what happens if Bitcoin enters a prolonged bear market? The premium that investors pay for MSTR over the value of its Bitcoin (known as mNAV, or the multiple of net asset value) compresses. Maybe it drops below 1x, meaning the stock trades for less than the Bitcoin is worth. Now selling new shares becomes punitive: Strategy has to issue more shares and accept more dilution just to raise the same amount of cash. The USD Reserve starts draining. The board raises the dividend to defend $100. But higher dividends burn cash faster. And at some point the market starts questioning whether the payments are sustainable.

That’s the reflexivity problem. The mechanism that stabilizes STRC under normal stress (raise the yield, attract buyers) becomes the thing that destabilizes it when the funding source itself is impaired. Defending the price by increasing the cost of defending the price.

It hasn’t happened in a fatal way. The system weathered a 50% BTC drawdown in early 2026 and STRC recovered to near par. But surviving one crash and surviving every crash are different things. And the annual dividend burden has grown significantly since launch, now exceeding $1 billion across all preferred series.

Dilution is also ongoing. Strategy has a $4.2 billion ATM program for STRC. As of mid-March 2026, roughly $2-3 billion of capacity remains, though this number moves quickly as issuance continues week to week.

And ultimately, this is Strategy Inc. credit risk. If Strategy as a company faces serious financial problems, STRC is an unsecured claim. There’s no collateral agreement that gives you direct access to the Bitcoin. The Bitcoin on the balance sheet supports the company’s creditworthiness, which indirectly protects you. But the BTC itself doesn’t belong to STRC holders.

Why It Matters

STRC does something worth paying attention to. It takes Bitcoin volatility and routes it through a corporate structure where common equity absorbs the wild swings and preferred equity collects steady, predictable income. The ATM program is what connects those two functions: it converts the premium that people pay for MSTR into the cash that funds preferred dividends.

This isn’t theoretical. It held up during an actual crash. Bitcoin fell 50%, MSTR dropped 70%, and STRC dipped briefly before recovering to near par.

If this model works at scale, it raises an interesting possibility: companies holding large Bitcoin positions could issue yield instruments that compete with money market funds and treasury bills, but at two to three times the rate. Saylor calls STRC his “iPhone moment.” The earlier instruments Strategy issued (convertible bonds, STRK, STRF) were functional but too complex or niche for broad adoption. STRC is meant to be the simple, accessible version. Buy at $100, earn 11.5%, price stays near par.

Whether that comparison holds comes down to one thing. Can Strategy keep selling equity at a premium to fund the machine? If Bitcoin appreciates over time and MSTR maintains its premium, the system feeds itself. If it doesn’t, the risks compound quickly. There’s not much in between.

How To Access STRC Through Roxom

Everything above is about what STRC is and how it works. This section is about what you can do with it on Roxom.

Roxom offers two ways to get exposure to STRC, both denominated in Bitcoin. You don’t need a U.S. brokerage account. And both settle dividends directly into Bitcoin.

Trade 1: Buy STRC with Bitcoin

The simplest version. You deposit BTC on Roxom, convert it into STRC shares, and start collecting the 11.5% annual dividend paid monthly. Roxom converts those USD dividend payments into BTC and credits them to your account automatically.

What this gives you: a way to earn yield on a Bitcoin-adjacent instrument without leaving the BTC ecosystem. Your returns come back as Bitcoin.

What it doesn’t give you: your original BTC position. You’ve converted Bitcoin into STRC. If Bitcoin goes up 50%, you don’t capture that upside because you’re holding STRC (which is designed to stay near $100). You’ve traded potential appreciation for predictable income.

Trade 2: The real honey, BTC-STRC carry trade

This is the more interesting structure, and it’s designed for people who want yield without giving up their Bitcoin.

Here’s how it works, step by step:

You deposit BTC as collateral on Roxom. Your Bitcoin is never sold. It stays in your account as collateral. Roxom issues you a USD loan against that collateral, up to 50% of your Bitcoin’s value (50% LTV). That loan is delivered as STRC shares at roughly $100 per share. You now hold STRC, which pays 11.5% annually. Your borrow cost is 7% annually. The difference between what you earn (11.5%) and what you pay (7%) is the carry: roughly 4.5% net on the loan amount, or about 2.25% annualized on your total BTC collateral. Dividends are converted to BTC and credited to your account monthly. You can repay the loan at any time in USDT. When you do, your Bitcoin is released. No maturity date, no origination fee, no minimum size.

To put numbers on it: if you post 1 BTC as collateral at $72,000, you receive a loan of $36,000, delivered as roughly 360 STRC shares. Over 12 months, those shares generate approximately $4,140 in dividends. Your borrow cost is roughly $2,520. Net carry: about $1,620, or around 2.25% on the value of your Bitcoin. And your BTC still belongs to you. If Bitcoin appreciates, your collateral grows in value and your LTV ratio improves automatically.

You can also reinvest the earned BTC back into the collateral pool, expanding your borrowing capacity and compounding the position over time. That’s optional and at your discretion.

What To Watch Out For

The carry trade has real risks beyond the STRC-specific ones already covered above.

Liquidation risk is the main one. You’re borrowing at 50% LTV with a liquidation threshold at 70% LTV. That means if BTC drops roughly 29% from your entry price, your collateral gets liquidated to repay the loan. In a market where Bitcoin dropped 50% in a few months (early 2026), that buffer can get tested quickly. Interest accrues monthly and adds to your loan balance, which gradually pushes your LTV higher even if Bitcoin’s price stays flat. You need to monitor this.

Roxom sends alerts at 55% (warning), 60% (margin call), and 65% (urgent margin call) before liquidation triggers at 70%+. You can top up collateral at any time to bring LTV back down, or jus lower your loan.

Both rates are variable. The 11.5% STRC dividend can change monthly (and has changed every month since launch). The 7% borrow rate is also an estimate and can move. If the spread between the two compresses, your carry shrinks. If it inverts, you’re paying more than you’re earning.

And all the STRC risks still apply. If Strategy suspends dividends, or if STRC breaks meaningfully below par, the economics of the trade change entirely.

Who Is This For

Trade 1 is for BTC holders who want simple, monthly income denominated in Bitcoin, and are comfortable converting some of their position into STRC to get it (or just buying with their USD holdings).

Trade 2 is for BTC holders who want to earn yield without selling their Bitcoin, and understand the mechanics and risks of a collateralized loan. It’s a carry trade. The concept is familiar to anyone who’s borrowed at a low rate to invest at a higher one. The difference is that everything here is denominated in or collateralized by Bitcoin, and the yield instrument is STRC rather than a traditional bond or deposit.

Both are available on Roxom with no minimum and no origination fee. Dividends settle in BTC. Loans can be repaid at any time.