Strategy's STRC is Collapsing! Will Saylor Be Forced to Sell More Bitcoin? | Truth Block

**Hurley** (0:00)
Michael Saylor's preferred stock, Stretch, is breaking down. And people are saying the Ponzi is finally collapsing. It's Terra Luna all over again, they say. Sell 5 to 10 billion of Bitcoin right now, or the whole thing dies. And the fear is simple. If the price keeps bleeding, the math starts forcing Saylor's hand. Sell billions in Bitcoin to feed a rising dividend into a market already hanging on by a thread. The biggest Bitcoin buyer in the world turned forced seller at the worst possible moment. So is this the beginning of the end of the Saylor trade, or the bottom of the whole bear market? This is TruthBlock. I'm Hurley. Let's mine truth.
Real quick, before we dig in, many of you who watch the show are not subscribed. So if you want the signal pulled out of all this noise every single day, subscribe to Simply Bitcoin and hit the notification bell. Okay, let's get into it. If you watch this channel, you already know what stretch is. STRC is the bread and butter of Saylor's digital credit empire.
A preferred stock built to sit right at $100 and pay you a fat yield twice a month. This is the piece that was never supposed to move. Well, this week it's completely broken down. And now it's at a record low in the mid-80s. And the timing is no accident. Two days ago, Kevin Warsh ran his first Fed meeting. And the tone went hard towards hawkish. He signaled that no more cuts are on the table. With some officials calling for hikes right now. Inflation is back over 4%.
The dollar ripped to a one-year high. And Bitcoin has been shoved down to its 200-week moving average. Things are definitely getting spicy. Oh, and Trump signed a ceasefire with Iran the same day. Hold on to that one as we'll dive into the implications of that later in the show. So if you've been here a while, the fear should sound familiar. Months back, we did a whole episode on STRC when Coffeezilla called it a perpetual motion machine in the next Terra Luna. We walked through the bear case. STRC demand dries up. Strategy gets forced to sell Bitcoin to cover the dividend. That selling drives Bitcoin down and the leverage on top unwinds. Well, here we are. It's not really a hypothetical anymore. That's the test that's running live right now.
When Stretch trades under $100 like it is now, Strategy can't issue any more of it. The cash spigot shuts off.
To push the price back up, they have to raise the dividend, which only makes the cash they owe bigger. They've been filling the gap by selling MSTR stock, but that premium has collapsed towards one to one.
There's no room left, which leaves one door.
Sell Bitcoin to fund the dividend. And the loudest voices in the room say it won't be a small trim like the last one. Just picture it for a second.
$5-10 billion dollars in forced Bitcoin selling, dumped into a market already hanging off a cliff. Saylor himself dragging Bitcoin to the true bottom of this cycle. That's the nightmare scenario. And that's actually the perfect place to talk about Ledn. Because if this whole mess teaches anything, it's what happens when leverage goes wrong. So if you're a Bitcoiner who needs cash, but you don't want to sell your stack and become a forced seller yourself, that's what Ledn is for. Bitcoin-backed loans done right. Your coins stay yours. Never lend out, and you can pay back anytime. Ledn has over $10 billion funded in eight years. So to get liquidity without giving up your Bitcoin, visit learn.ledn.io/simply to learn more. Okay, so is the Ponzi actually collapsing?
Let's look closer because the loudest story is usually the wrong one. Two things are happening here, and neither one is the business is broken. First, this is clearly a leverage wipeout. People started treating stretch like a risk-free place to park cash.
So they levered it up. The second the price slipped, the margin calls hit, which forced more selling, which dropped it further. That's not Bitcoin failing, that's gamblers getting flushed. Second is linked to Warsh going hawkish. A preferred stock is the longest duration asset there is, a promise of payments forever. And when the Fed hikes, the outlook forever is what reprices the hardest. And it wasn't just stretch that fell. Every preferred and Saylor's stack dropped together across two different companies. One fund blowing up doesn't do that. A rate shock does. So yes, this is a real stress test, but it's also the market repricing duration and flushing leverage, not Saylor running Madoff. And the Bears' entire case hangs on one word, forced, as in forced to sell, like it's a death sentence. Saylor says that's exactly backwards. Here he is at BTC Prague speaking with Natalie Burnell.