Strategy’s STRC preferred stock has quietly emerged as the single biggest position in three leading US preferred equity exchange-traded funds (ETFs), even though the security continues to trade well below its $100 par value.
Michael Saylor, co-founder and executive chairman of Strategy, revealed that STRC is now the largest holding in BlackRock’s iShares Preferred and Income Securities ETF (PFF), Virtus InfraCap’s U.S. Preferred Stock ETF (PFFA), and VanEck’s Preferred Securities ex Financials ETF (PFXF).
According to figures shared by Saylor, those three funds together now hold $756m worth of STRC, giving ETF investors significant indirect exposure to the company’s preferred stock alongside traditional preferred issues from established US corporates.
Despite that growing institutional presence, STRC has not returned to the $100 level it was designed to track. On 24 July, the shares closed at $86.89, up 2.29% on the day, before edging higher to $87.14 in after-hours trade, based on Yahoo Finance data. The official close left the stock 13.11% below par.
Discount complicates Strategy’s Bitcoin funding plan
The sub-par price has become a strategic constraint for Strategy, which uses STRC issuance to finance purchases of Bitcoin.
The company can raise capital by selling new preferred shares at or near $100 and then deploying the proceeds into Bitcoin. However, issuing fresh stock at a steep discount would bring in less cash per share, undermining the economics of the programme and reducing the incentive to expand it while the discount persists.
Strategy chief executive Phong Le has tied future STRC issuance – and further Bitcoin accumulation – directly to a recovery in the preferred stock. In a July interview, he said the company would restart issuing new STRC only if the price returned to par.
“We’ll continue to build that. And yeah, when Stretch gets back to par, we’ll issue more. We’ll buy more Bitcoin,” Le said.
Under that model, a move back to $100 would allow Strategy to sell additional STRC on more favourable terms and channel the cash into its Bitcoin treasury. Until then, Le’s comments indicate Strategy has limited motivation to enlarge the programme.
Institutional holdings surge as retail share slips
Le also highlighted a shift in the shareholder base. Between March and July, he said the average STRC position held by institutional investors rose 105% to $3.5m. Over the same period, the proportion of the stock owned by retail investors fell from 78% to 71%, according to figures he published on X.
“The institutions are coming,” Le wrote.
Those numbers, he added, corrected earlier reports suggesting institutional average holdings had increased by just 10%, stressing that positions had more than doubled over four months.
Not everyone views rising institutional involvement as a straightforward vote of confidence in either STRC or Bitcoin. Bitcoin critic Peter Schiff, responding to Le’s post, argued that some retail investors may have exited at a loss while professional traders entered more complex relative-value strategies.
Schiff suggested that certain funds might have bought STRC while shorting Strategy’s common stock, MSTR, as a spread trade, or combined long STRC positions with short Bitcoin exposure.
“None of those trades are bullish bets,” Schiff wrote.
High dividend yet persistent discount
To attract investors and stabilise the price, Strategy currently pays STRC holders a 12% annual dividend in cash, distributed through two payments each month. The company’s STRC information page notes that management adjusts the dividend rate monthly in an attempt to keep the share price close to its $100 par value and limit volatility.
So far, the enhanced payout has not eliminated the discount. STRC’s 52-week trading range runs from $71.25 to $100.42, and the 24 July close left the stock much nearer the bottom of that band than to par.
The pressure on Strategy’s preferred securities has already fed through to its Bitcoin reserves. A filing dated 6 July disclosed that the company sold 3,588 BTC for $216m in order to fund dividends on its digital-credit instruments and maintain liquidity. After the sale, Saylor reported that Strategy held 843,775 BTC and had increased its US dollar reserves to $2.55bn.
New trading channels fail to close gap to $100
Alongside ETF accumulation, STRC has also gained new avenues for trading. On 6 July, Binance Stocks added STRC for spot trading, according to an announcement reported by crypto.news. That listing followed the introduction of STRC-linked perpetual futures on the platform and provided Binance users with another route to access the preferred stock.
Binance said fully paid securities lending would be made available once stock transactions had fully settled.
However, the continued gap to par suggests that broader distribution and growing ETF ownership have yet to generate sufficient demand to lift STRC back to the $100 level Strategy views as crucial for resuming preferred-share-funded Bitcoin purchases.
