Strive Inc. (NASDAQ: $ASST) CEO Matt Cole blamed leveraged liquidations for a sharp break in Bitcoin (CRYPTO: $BTC) linked preferred equity products Thursday, after Strive's SATA and Strategy's (NASDAQ: $MSTR) STRC (NASDAQ: $STRC) slid below the $100 levels they are designed to trade around.
The pressure hit a corner of the market that has grown important to crypto treasury companies. Preferred equity and digital credit products have helped firms raise capital for Bitcoin accumulation while offering investors dividend exposure that is supposed to be steadier than common stock.
That structure looked less steady during Thursday's session. SATA dropped as low as $92.88 before closing at $97.71, while Strategy's STRC fell as low as $82.53 and closed at $88.59. Both products saw unusually heavy activity, with SATA volume reaching $153 million and STRC volume reaching $941 million, according to figures shared by Strive Chief Risk Officer Jeff Walton.
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Cole called it the most difficult day in the history of digital credit, but said the selloff reflected a leverage liquidation event rather than a deterioration in underlying credit quality. He said investors can borrow against the instruments until the trade turns against them, forcing selling into a market that was not built for that level of flow.
The episode adds another layer of scrutiny to the financing machine behind Bitcoin treasury companies. Strategy has relied heavily on preferred shares, convertible notes and equity issuance to expand its Bitcoin position, while Strive has used a similar playbook to build exposure through its own preferred structure.
The concern is not that the products stopped trading, but that they moved far enough from par to challenge the low-volatility dividend narrative that helped attract everyday investors.
For now, the market is treating the drop as a stress test for digital credit rather than a clean rejection of the Bitcoin treasury trade.
Strategy Inc. (NASDAQ: MSTR) is trading at $112.41 U.S. per share. Strive Inc. (NASDAQ: ASST) is trading at $14.85 U.S. per share.