STRC Par Value Collapse...Is Strategy (MSTR) About to Unleash a Bitcoin (BTC) Selling Bomb?

▲ Strategy (MSTR), STRC, Bitcoin (BTC)/AI Generated Image

Strategy (MSTR)'s Bitcoin buying strategy, combined with STRC's discounted trading, has emerged as a new source of instability in the cryptocurrency market. The market is reacting more sensitively to dividend funding and the possibility of forced selling than to additional purchases.

Paul Barron, host of the cryptocurrency YouTube channel Paul Barron Network, claimed in a video uploaded on June 25 (local time) that “Strategy and STRC have entered a doom loop.” He diagnosed that as STRC falls below its par value, it is shaking the investment sentiment of Strategy's stock price and the overall Bitcoin (BTC) market.

Barron also saw the macro environment turning unfavorably for Strategy. He said, “Now is the worst time to look at the STRC problem.” According to the video, US May Personal Consumption Expenditures (PCE) inflation rose to 4.1%, the highest level since April 2023. Core PCE inflation also rose to 3.4%, presented as the highest level since October 2023.

The key issue is STRC's dividend funding. In the video, it was argued that Strategy's capacity to pay dividends has decreased from approximately 7 years to about 14 months. Barron pointed out that if cash preservation is chosen, the Bitcoin buying strategy weakens, and if Bitcoin is sold, the market could interpret it as a bearish signal.

Questions were also raised about Strategy's Bitcoin holding strategy. The video reported that Strategy bought 520 BTC this week for approximately $34.9 million. The average purchase price was mentioned as $67,068. Barron believed that “the market can no longer give MSTR the same premium as in the past.”

The controversy over the STRC name and legal risks also fueled anxiety. The video criticized that STRC was once described as a dividend-based stablecoin. It also mentioned that the Rosen Law Firm opened an investigation related to Strategy and STRC. Barron claimed that “if no new funds come in, Strategy might have to sell Bitcoin at some point.”

Barron believed that the STRC problem is not limited to a single product's weakness. He warned, “Bitcoin prices, MSTR stock prices, DeFi, and discussions on US cryptocurrency market structure bills could all be shaken together.” The video's conclusion is that risk management is more important than opportunity cost in the current market.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*