The increasing correlation is eroding STRC’s appeal as a relatively stable income instrument.
Strategy Inc.’s perpetual preferred stock, STRC—known as “Stretch”—is now moving more closely in line with bitcoin’s price, weakening its role as a steady yield play.
TradingView data shows the 90-day correlation between STRC and bitcoin has climbed to nearly 0.70, the highest since its July 2025 debut. The link has strengthened in recent weeks as both assets declined, with STRC down 23% to about $76 this month and bitcoin falling nearly 20% to below $60,000, levels last seen in October 2024.
This tighter relationship alters the risk profile for investors who viewed STRC as a more stable income option tied to the largest corporate holder of bitcoin, which owns over 847,000 BTC worth roughly $50 billion.
STRC was structured as a hybrid security—a variable-rate perpetual preferred stock with a $100 par value that pays monthly dividends. Its annualized yield is around 11.5%, with adjustments made regularly to keep the stock trading near par. When shares trade above $100, Strategy can issue additional equity and use the proceeds to buy more bitcoin.
However, the current environment is testing that model. With STRC trading well below par, the company’s ability to raise fresh capital for bitcoin purchases is constrained. In a notable departure from its long-standing “never sell” stance, Strategy has recently sold small amounts of bitcoin, reportedly to meet dividend payments.
At the same time, the stronger correlation with bitcoin means STRC offers less insulation from the cryptocurrency’s volatility.
Market views are mixed. Some investors see the deep discount as an opportunity for yield-focused capital, expecting a rebound toward par that could deliver both income and price gains. Others warn that prolonged weakness could pressure the company’s capital structure, increase reliance on reserves, and weaken the feedback loop that has supported its aggressive bitcoin accumulation strategy.
For now, the closer alignment with bitcoin suggests STRC’s performance will remain closely tied to the broader crypto market.
