Strategy Faces New Bitcoin Doubts After STRC Falls Below Par Value

TLDR

• Strategy may become less important in Bitcoin’s next cycle after the STRC selloff raised concerns.
• Bitwise CIO Matt Hougan said institutions could replace Strategy as Bitcoin’s main demand driver.
• STRC fell below its $100 par value and triggered questions about Strategy’s dividend model.
• Bitcoin dropped to $58,190 on June 25 as the STRC turmoil weighed on market confidence.
• Hougan said Strategy still has enough liquid assets and does not face immediate liquidity risk.

Strategy’s role as Bitcoin’s leading corporate buyer faces scrutiny after the STRC selloff. Bitwise CIO Matt Hougan said Strategy may matter less in Bitcoin’s next cycle. He said institutions could drive demand instead.

Bitwise Says Strategy May Lose Its Bitcoin Buying Lead

Hougan said Strategy shaped Bitcoin demand for years through purchases. However, he said that position may not continue after the STRC stress. “Those days are likely over,” Hougan said Thursday.

He added that Strategy could remain a net buyer during another bull run. Yet he expects banks, asset managers, pensions, and sovereign funds to gain influence. Therefore, Bitcoin demand may become less dependent on one holder.

The shift does not remove the company from the market. Instead, it reduces its weight in the next Bitcoin cycle. He said Strategy would likely become “less important” than before.

STRC Collapse Hits Bitcoin Sentiment And Raises Model Questions

The concern grew after STRC fell below its $100 par value. The preferred stock dropped under $75 and raised questions about dividends. Therefore, traders questioned the structure behind the company’s Bitcoin purchases.

Bitcoin fell to $58,190 on June 25, marking a 21-month low. The decline coincided with the STRC break and deepened market pressure. Therefore, the event weakened confidence across crypto markets.

Hougan called the episode “classic end-of-cycle dynamics.” He compared it with Grayscale’s GBTC premium collapse in 2021. He said high-yield money entered Bitcoin, although Bitcoin offers neither yield nor low volatility.

Strategy Faces Pushback As Bitcoin Liquidity Debate Continues

Strive CEO Matt Cole said the STRC issue received too much attention. He told Nate Geraci that the market overreacted to the event. Cole said Strategy owns 847,363 Bitcoin, equal to 4% of total supply.

Cole argued that a 4% position would not meet the SEC’s material threshold. “They start to view a position to be material at 5%,” Cole said. Therefore, he suggested the market treated the holding as larger than it is.

Hougan said Strategy does not face liquidity pressure. He said the company holds $52 billion in liquid assets against $7 billion in debt. He added Bitcoin would need to fall 70% to around $18,500 before serious risk emerges.

Strategy expanded its dollar reserve to $2.55 billion after the STRC stress. In addition, the company said it would sell Bitcoin where needed to fund dividends. That move eased pressure, but reduced its image as the most aggressive buyer.

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