TL;DR:
- K33 warns that Strategy’s Bitcoin buying strategy funded with STRC creates structural risks tied to market sentiment dynamics.
- STRC is a perpetual preferred stock designed to trade near $100, with a variable annualized dividend currently around 11.5%.
- Strategy bought around 40,331 BTC in two weeks, its fourth largest purchase in that timeframe; 55% of the capital came from STRC.
The research and brokerage firm K33 warned that the aggressive bitcoin accumulation by Strategy, driven largely by its perpetual preferred stock STRC, creates structural risks tied to market sentiment dynamics. The analysis was published by Vetle Lunde, the firm’s head of research, in a recent report.
According to the report, in its latest buying round, Strategy allocated approximately $1.18 billion from STRC market sales to acquire bitcoin, out of a total of $1.57 billion. The remaining $396 million came from its Class A common stock. Lunde noted that STRC, which is designed to trade near $100 and offer a variable monthly dividend of around 11.5% annualized, converts yield demand into bitcoin purchases, but its stability depends on maintaining that target price and sustained market confidence.
K33: The Risks of Depending on Sentiment
K33 warned that the risks extend beyond the price of BTC. STRC holders face upside limited to dividends, but downside exposure during market corrections, where STRC has already recorded multiple drops of between 5% and 10%. If STRC trades below its target price for a prolonged period, confidence in its mean-reversion dynamic could deteriorate, shifting its profile from a stable yield product toward something closer to risk credit.
K33 emphasized that the model requires STRC to remain near its target price and that Strategy’s stock trades at a premium to its net asset value — conditions that are largely sentiment-dependent and could deteriorate simultaneously in weak markets. Nevertheless, Lunde clarified that the company holds approximately $2.25 billion in cash, enough to cover around 25 months of dividends, and ruled out that the structure represents an immediate systemic risk for Bitcoin given that financial buffer.
Bitcoin Holds Where Other Assets Retreat
Despite the risks identified, the company’s structure has enabled considerable accumulation. Strategy bought around 40,331 BTC in two weeks, its fourth largest purchase in that timeframe on record.
As for the crypto market broadly, Bitcoin accumulated a gain of approximately 13% since the close of February 27, while the Nasdaq and the S&P 500 retreated and gold deepened its losses due to the war in Iran. K33 attributes this relative resilience, in part, to the fact that the asset entered that period oversold, underrepresented in portfolios and with elevated short positioning after months of underperformance and a decline of nearly 50%.
