Why MicroStrategy Thinks Its STRC Could Unlock $100 Billion in Bitcoin Liquidity

At the end of last month, MicroStrategy (MSTR.US) introduced its Stretch Perpetual Preferred Stock (STRC). Executive Chairman Michael Sayler likened this financial product to the company's "iPhone moment."  

The preferred stock has already raised $2.5 billion, and a newly launched $4.2 billion at-the-market (ATM) offering program could further expand its scale. This high-yield, Bitcoin-backed dividend product is specifically designed for yield-seeking investors.  

How STRC Works  

STRC is a floating-rate perpetual preferred stock aimed at providing yield-focused investors with stable pricing, high returns, and liquidity while offering indirect Bitcoin exposure. The stock, with a $100 face value, pays monthly dividends at an initial annualized rate of 9%. MicroStrategy can adjust the dividend monthly based on predefined rules to maintain STRC's trading price close to its $100 target.  

Each STRC share is overcollateralized with Bitcoin at a roughly 5:1 ratio—meaning for every $1 of STRC issued, MicroStrategy holds about $5 worth of Bitcoin. STRC ranks higher in repayment priority than other preferred stocks like STRD and STRK, as well as common stock, but remains subordinate to debt instruments and the STRF preferred series.  

Dividends are cumulative and compound. A key mechanism is the "dividend blocker," which takes immediate effect if a dividend payment is missed—no subordinate securities can receive dividends until all STRC arrears are paid in full. Once listed on Nasdaq (now completed), the stock can be redeemed at the issuer's discretion and includes a change-of-control put option exercisable at liquidation value plus accrued dividends.  

Designed as a Bitcoin-backed, high-yield savings instrument, STRC avoids the volatility of direct cryptocurrency ownership while eliminating the duration risk associated with traditional preferred stocks.  

STRC's Initial $2.5 Billion Raise  

MicroStrategy raised approximately $2.5 billion by issuing 28 million STRC shares at $90 per share. The offering was announced on July 21 and completed on July 29, with proceeds earmarked for general corporate purposes, including Bitcoin acquisitions and working capital.  

The board declared the first monthly dividend of $0.80 per share, payable on August 31, 2025, to shareholders of record as of August 15.  

Sayler described STRC as a "simple, scalable financial instrument" that addresses the limitations of traditional financing tools like convertible bonds and complex long-term preferred stock. The product targets not only institutional allocators but also yield-hungry retail investors.  

The $4.2 Billion ATM Plan  

On July 31, MicroStrategy announced a new sales agreement allowing it to issue up to $4.2 billion worth of STRC shares via an ATM offering. This mechanism enables the company to adjust issuance pace flexibly based on market conditions and pricing, ensuring gradual liquidity access.  

Internal guidance indicates that MicroStrategy intends to strictly maintain the offering price within a $99–$101 range (excluding fees) to preserve STRC's $100 target trading price. The company clarified that this pricing discipline does not apply to other preferred stock programs, underscoring STRC's unique positioning.  

The ATM program allows MicroStrategy to meet funding needs dynamically, support dividend policies, expand Bitcoin holdings further, and maintain shareholder alignment.  

The "iPhone Moment"   

Michael Sayler views STRC as a transformative milestone in corporate financing rather than just another fundraising tool. During the Q2 2025 earnings call on July 31, he compared it to an industry-redefining "iPhone moment," suggesting its disruptive potential.  

STRC's core advantage lies in its universality. Unlike MicroStrategy's earlier instruments—such as STRK, STRF, and STRD, which were innovative but complex and volatile—STRC resembles a high-yield savings account.

"If you go down the street and you ask 100 people, would you like a one-month instrument that actually pays you 500 basis points more than SOFR or a savings account that pays nine and a half percent, they would generally say yes," Sayler quipped, emphasizing the product's simplicity.  

He believes STRC solves two key problems: eliminating long-term volatility by locking in short duration and low price fluctuation while delivering a premium yield above bank rates. "we've stripped down to a one month duration and it pays 500 basis points above your bank account," he explained, referring to the product's 9% annualized floating dividend.  

A critical design feature is maintaining near-par ($100) trading, particularly important for price-sensitive investors. Sayler noted that earlier products lost retail interest due to 5–10% principal volatility, whereas STRC's Bitcoin overcollateralization helps anchor its value even during market swings.  

"If stretch actually, you know, hits its par and it trades with low volatility, then you could, in theory, sell infinite amounts $100,000,000,000 of it, $200,000,000,000 of it. Right? " And you could use that to have any amount of leverage you wanted," he told analysts. This would allow MicroStrategy to accumulate Bitcoin at scale without selling any—effectively monetizing its reserves as collateral while making liquidity accessible to retail investors.  

Sayler argues that the combination of simplicity, stability, and high yield makes STRC transformative. Just as the iPhone redefined mobile computing, STRC could establish a new paradigm for Bitcoin-denominated corporate capital raising.