June 18 was supposed to be an ordinary Thursday for the nascent digital credit market. It was not.
STRC, Strategy’s Variable Rate Series A Perpetual Stretch Preferred Stock, cratered to an intraday low of $82.5. SATA, Strive’s own Variable Rate Series A Perpetual Preferred Stock, tumbled from its $100 par value into the low 90s. Strive CEO Matt Cole called it “the most difficult day in the history of Digital Credit.”
This wasn’t a credit event. Nobody defaulted. No issuer’s fundamentals deteriorated. Leveraged investors got hit with margin calls, which triggered forced selling, which triggered more margin calls.
What actually happened
A leverage-driven selloff hit the digital credit market on Thursday, sending Strategy’s STRC preferred stock and Strive’s SATA preferred stock sharply lower before both securities recovered by the end of the session.
