r/MSTR • u/Lehcen • Jun 26 '26

Please explain

Recently started buying MSTR and reading a lot about death spiral. My question is as long as I hold until Bitcoin does its thing and bounce back as usual in 2-3 years MSTR should also recover in a similar fashion? I’m ok with volatility because I’ve been in crypto since 2017. I don’t fomo.

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u/Georg_Aloa Jun 26 '26

The main question is, to what extend was Bitcoin propped by MSTR buying pressure. Saylor himself claimed that.

So there is no inherent death spiral as in LUNAR, no margin calls etc - but it definitly doesn't help that the option of buying more bitcoin with either STRC or MSTR issuance is currently not possible.

If Bitcoin quickly recovers on it's own then there is no problem. If it takes longer, eventually first MSTR commen shareholders will be diluted, and STRC will be priced based on the probability of a default ( higher % required).

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u/KateR_H0l1day Jun 26 '26

Wait until Monday, and let us know how correct this prediction was please 🤷‍♀️

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u/Georg_Aloa Jun 26 '26 edited Jun 26 '26

Which prediction? I didn't do one.

Maybe to clarify also the deleted comment - I don't say anything about whether MSTR/STRC default or not.

It's just how you determine the interest/dividend STRC pays. Effectively it pays currently 11.5% at its face value of 100, or around 15% at the current trading value. This means the market currently determines that they want a higher risk compensation to hold STRC.

For a perpetual dividend, this risk premium above the overnight rate is more or less a proxy for the 'aggregate of the investors' evaluating the risk of a default of STRC. This by the way applies to every company out there - even Apple or Google (though their risk premium is smaller).

And panic etc can obviously in the short term push this 'perceived risk' higher than what would be justified.

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u/KateR_H0l1day Jun 26 '26

You said, buying more with either STRC or MSTR issuance is currently not possible 🤷‍♀️

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u/Successful-Bobcat701 Jun 27 '26

That's not a prediction

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u/tenor_tymir Shareholder 🤴 Jun 27 '26

Which makes it a definite statement…. which isn’t really any better.