Bitwise Chief Investment Officer Matt Hougan said the sharp sell-off in Strategy's STRC preferred stock is a "painful but necessary" part of the current crypto market cycle and argued it reflects the kind of end-of-cycle deleveraging that typically precedes a market bottom.
Bitcoin fell below $60,000 in late June, its lowest level since 2024, a decline Hougan attributed largely to turmoil around STRC, the perpetual preferred equity instrument Strategy (MSTR) uses to help fund its bitcoin purchases.
A preferred stock under pressure
STRC launched last year, targeting a $100 par value, initially paying a 9% yield.
Strategy said it would raise that yield by 0.25 to 0.50 percentage points whenever the price drifted below $100 to draw buyers back toward par. The mechanism worked for a while, since the rate climbed to 11.5%, the price held near $100, and investors poured $10.5 billion into the instrument, helping to fund Strategy's bitcoin purchases.
