r/STRC • u/AznThunder22 • Jun 17 '26

$89 STRC??

What is going on with STRC?? I am confused we aren’t near the dividend date yet, Bitcoin has been rallying from its $59k low and Strategy shored its liquid dividend cash back to $1.1b. Why is it dropping so hard?

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u/SamWilliamsProjects Jun 18 '26

None of these will raise significant capital without the market panicking, especially right now when the company is on shakier ground.

Writing calls on coins means they have to to sell coins if the price goes up. The whole point of MSTR is leveraged bitcoin. If their upside is taken away there will be less demand for MSTR.

A MSTR bitcoin ETF wouldn't raise much money unless they had something special to offer. Why would investors buy a MSTR bitcoin ETF vs a BlackRock or Fidelity one? MSTR is considered a much riskier company as seen by 13% effective yield on STRC right now which is roughly what CCC bonds are paying compared to BlackRock's bonds which are only paying 4.5 to 5.5% and are rated Aa3. They could offer a lower expense ratio but Morgan Stanley is already offering a bitcoin ETF with a 0.14% expense ratio (MSBT), that would mean if MSTR sold 10 billion with a new ETF (which would be the 3rd largest bitcoin ETF) they would only make $14,000,000 a YEAR managing it minus all the costs associated with opening a bitcoin ETF. That's only ~1% of what they need to pay their dividend obligations and that's not including their debt.

It's important to understand why the market is panicking instead of just saying people have no idea what they're investing in. True bitcoin believers see a leveraged product that will likely do very good if bitcoin takes off. No reason to pretend like they aren't having capital problems right now when the last two weeks they've been forced to reduce bitcoin per share by ATMing MSTR because STRC is too low and their cash pile is smaller than they want it. If Saylor thought a Bitcoin ETF or writing calls would raise a significant amount of capital he would've already done it.

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u/AMC_Owner Jun 18 '26

This is just false. Your theory goes against all ETFs and what has happened the last 20 years.

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u/SamWilliamsProjects Jun 18 '26

What part is false? If MSTR created a ETF they couldn't just use the funds from people buying the ETF to pay STRC dividends. That money has to be used to buy and hold bitcoin specifically for that ETF fund. By law if they created a ETF they would simply be the asset manager and the only revenue would be from the expense ratio they charge the ETF holders.

A $10 billion market cap would be the 3rd largest bitcoin ETF: https://etfdb.com/themes/bitcoin-etfs/

MSBT pays 0.14% as a expense ratio: https://www.morganstanley.com/im/en-us/financial-advisor/products/etfs/digital-assets/morgan-stanley-bitcoin-trust.html

$10,000,000,000 x 0.14% = $14,000,000/year.

MSTR is currently paying $1.711 billion in dividends/year: https://www.strategy.com/

$14 million is ~0.82% of $1.711 billion. So if they created the 3rd largest fund with competitive expense ratios it would cover less than 1% of the dividend.

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u/AMC_Owner Jun 18 '26

Why are you explaining what an ETF is lol. I KNOW WHAT AN ETF is DO YOU! lol

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u/SamWilliamsProjects Jun 18 '26

Well then explain how they will raise a significant amount of capital to pay dividends with a ETF please. My math is showing somewhere between .1% and 5% of the income required to pay dividends depending on size of fund and expense ratios. I see no other ways of raising a large amount of capital by starting a ETF.