Strategy’s STRC-fueled bitcoin buying spree highlights sentiment-driven structural risks: K33

K33 research highlights potential structural risks arising from Strategy’s increasing reliance on its STRC perpetual preferred stock to fund bitcoin (BTC) acquisitions. Approximately $1.18 billion of Strategy’s $1.57 billion in bitcoin purchases last week came from STRC sales, compared to $396 million from its common stock. While STRC allows Strategy to raise capital and convert investor demand into bitcoin, its stability hinges on maintaining a target price of around $100 and continued market confidence. K33 warns that risks extend beyond bitcoin’s price, as STRC holders face capped upside but potential downside, and prolonged trading below the target price could erode confidence. These risks are compounded by the need for both STRC price stability and Strategy’s equity to trade at a premium, both of which are sentiment-driven. Despite these risks, Strategy has added 40,331 BTC in two weeks, with 55% funded by STRC, and K33 believes the structure can support incremental demand in favorable conditions, not posing an immediate systemic risk due to Strategy’s cash reserves.

(Source：The Block)