The Saylor Show: How an 11.5% Yield Became Bitcoin's Favorite Side Hustle

At Strategy's Vegas shindig, the main event wasn't just corporate treasuries going orange-pilled. According to TD Cowen's Lance Vitanza, the real headliner was STRC, the firm's variable-rate preferred share doling out an 11.5% annual yield. 'It felt like every other panel was focused on STRC,' Vitanza noted. The degen bait worked; Strategy has reeled in over $1.5 billion via STRC since the conference.

STRC is basically a financial Roomba programmed to hover around its $100 par value. If the price moons above par, Strategy prints more shares to stack more sats. If it dips below, they can juice the dividend to suck the price back toward the century mark. Michael Saylor, never one for subtlety, has dubbed STRC the company's 'iPhone moment' as a consumer product.

Recently, Strategy executed its chonkiest Bitcoin buy of the year, gobbling over $1.5 billion worth in a single week, fueled entirely by STRC sales. The corporate whale now boasts a stash of roughly 761,000 Bitcoin. Just last week, it raised nearly $1.2 billion via STRC, a serious pump from the $377 million haul the week prior.

Other players are now apeing the model. Strive, co-founded by Vivek Ramaswamy, launched SATA, a blatant STRC clone offering a 12.75% annual yield. Strive has already deployed $50 million into Strategy's product. CEO Matt Cole, clearly dreaming in green candles, declared, 'I think this is a trillion-dollar opportunity.'

Brazil-based Bitcoin treasury firm OranjeBTC became the first to publicly flaunt an STRC allocation at the conference—a cool $11 million position. Sam Callahan, OranjeBTC's director of Bitcoin strategy, argued the exposure offers better strategic perks than cash or U.S. Treasuries for short-term needs.

Callahan framed it as a beautiful, circular degen loop: Strategy uses the proceeds to buy Bitcoin, and OranjeBTC helps stoke demand for the very asset its entire fortune rides on. He even raised the possibility of using STRC to capture a spread, noting the company can borrow against its own stash at rates cheaper than what STRC currently pays out.

Saylor markets STRC as 'digital credit,' a fancy term for a product that lacks the legal protections and collateral requirements of traditional debt. It's an unsecured asset, plain and simple. Still, Vitanza conceded it's smart for Strategy to hint that STRC is indirectly backed by Bitcoin, as the firm could theoretically liquidate $51 billion in holdings to redeem investors if things got spicy.

Strategy plans to fund STRC's juicy dividend by selling common shares, whose price has cratered nearly 58% over six months to $138. TD Cowen maintains a 'Buy' rating but quietly trimmed its price target to $440. Vitanza suggested a near-term cash crunch is unlikely, partly thanks to $2.5 billion in cash reserves last year.

A potential plot twist looms, however: Strategy has $8.2 billion in convertible debt maturing in 2028. If the stock price pumps hard enough, investors can simply swap that debt for common shares.

Saylor has boldly claimed Strategy could weather a Bitcoin plunge to $8,000 by tapping its treasury of 763,000 Bitcoin. On prediction market Myriad, traders priced in an 18% chance of that apocalyptic scenario happening this year—so you know, non-zero.

On Monday, Strategy snagged around 1,000 Bitcoin for $77 million using proceeds from common share sales. Bitcoin traded around $71,000, sitting a cozy 44% below its all-time high of $126,000.

If Bitcoin's price stages a comeback, Vitanza expects Strategy to dial STRC's dividend yield down, suggesting 8.5% as a feasible target within a couple of years. Institutional investors are now trying to decipher the exact conditions under which Strategy might suspend STRC's dividend and what that cliff would look like.

Strategy unveiled plans Monday to issue a staggering $44 billion worth of common and preferred equity to fuel future Bitcoin purchases. It gained the ability to print an additional $21 billion of common stock (MSTR), plus $21 billion of STRC and $2.1 billion of STRK.

After a dividend hike to 11.5%, STRC traded above its $100 par value for a few glorious days, but has since traded below for seven straight sessions. Strategy's acquisition pace slowed last week; it bought 1,031 Bitcoin for $76.6 million via common stock, its most modest purchase in a month.

Saylor posted 'The Orange March Continues' on X, a classic morale-boosting tweet. The company's stock price edged up 2% to $138. Bitcoin changed hands around $71,420, slightly clawing back weekly losses.

Strategy's stockpile reached 762,099 Bitcoin, valued above $54 billion. This also means the largest corporate holder is sitting on a nearly $3.3 billion unrealized loss, with an average purchase price of $75,694 per coin—a number they're undoubtedly trying to DCA down.

Strategy has unveiled a $42 billion at-the-market equity program, split evenly between $21 billion of common stock and $21 billion of STRC, plus a new $2.1 billion ATM for STRK. It added three firms to its sales syndicate, bringing the total agents shilling for them to 19.

As of March 22, Strategy had remaining dry powder on existing ATM programs: approximately $6.24 billion of common stock, $1.98 billion of STRC, $20.33 billion of STRK, and $1.62 billion of STRF. The printer is well-oiled and ready.

Gold bug Peter Schiff couldn't resist trolling Michael Saylor over a 4.5% loss on last week's Bitcoin buy, asking how he managed that feat. Even after a minor rally, Strategy is still down 4.5% on that specific purchase. The firm holds 762,099 BTC valued at $53.88 billion, with an average entry price of $75,699, generating an overall 6.7% paper loss with Bitcoin around $71,000.

For critics, a 4.5% loss is prime irony. For Saylor, it's just a potential opportunity to deploy part of the new $44.1 billion war chest to average down, inching ever closer to the holy grail of one million BTC.