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What's going on with $STRC? Let us explain:
$STRC is a product Michael Saylor's Strategy sells to raise cash. You pay $100 for a share, and they pay you back roughly 11.5% a year in cash. Think of it like a high-yield account, not a normal stock. They then use that cash to buy Bitcoin $BTC.
The deal only works if the price stays near $100. That's the promise: park your money here, collect the yield, and your $100 stays worth about $100.
Strategy keeps it near $100 using one lever: the dividend. If the price slips below $100, they raise the payout to attract buyers and lift it back up.
The reason Strategy cares so much? When $STRC sits at $100, Strategy can issue new shares and use the cash to buy more Bitcoin. That's a big part of how the whole machine is funded.
But below $100, the machine stalls. Every $STRC share carries a $100 obligation no matter what it sells for, so issuing at $90 means collecting $90 while still owing dividends on the full $100. They'd be taking on a dollar of obligation to raise ninety cents. So they stop issuing and wait for the price to climb back toward par.
And right now, that machine is breaking. $STRC hit a new low today at ~$82. Bitcoin has been weak, and Strategy's cash pile has dropped from $2.25B to around $1B .
Two problems hit at once: Below $100, Strategy stops selling new shares, so that funding source dries up. And the dividend still has to be paid in cash every couple of weeks no matter what. So they reached into the Bitcoin...
In late May, Saylor sold 32 BTC to cover obligations on $STRC. First bitcoin sale since 2022, and the first sign the system was being truly tested.
That sale is the spark... it told the market Strategy was tapping its bitcoin to make payments, confidence cracked, and buyers started demanding a higher yield to hold $STRC. The price slid, and the loop kicked in.
The loop summarized: Price drops, so they need a higher dividend payout to defend $100. A higher payout means more cash owed to investors. More cash owed means dipping into cash reserves or selling bitcoin. Selling bitcoin pushes its price down and erodes investor confidence in the entire structure. A lower bitcoin price pushes $STRC down again. The death spiral begins.
Each step makes the next one worse. That's why the market is watching $STRC so closely right now.
$MSTR $BTC
Kevin Warsh’s first Fed projections imply one rate hike before year-end with the 2026 median fed funds estimate at 3.8% versus the current 3.50% to 3.75% range.
PCE is now projected at 3.6% and core PCE at 3.3% with both up sharply from the Fed’s 2.7% March forecast.
Very hawkish dot plot.
Nine out of 18 officials have at least one hike this year (and six of those 9 have *multiple hikes*).
Only one person has a cut this year, and one participant (presumably Warsh) didn't submit an SEP
The statement gets a complete writethru from top to bottom, much shorter
WARSH DEBUT MAY TRIGGER BOND VOLATILITY
Kevin Warsh could spark bond-market volatility in his first press conference today, Fidelity portfolio managers say. The Fed is expected to hold rates at 3.5%–3.75% and shift to a neutral stance, but uncertainty centers on Warsh’s inflation messaging.
Markets have swung amid geopolitical shocks, with Treasuries and swaps repricing toward possible hikes. Investors are focused on whether Warsh sounds hawkish or dovish in his debut.
Iran's Foreign Minister: After the first phase, negotiations will continue for 60 days for a final agreement, which will include the nuclear issue and lifting of sanctions.
IRAN CAN THREATEN HORMUZ CLOSURE AGAIN, US INTEL WARNS
US intelligence assessments indicate Iran can potentially shut down the Strait of Hormuz again after demonstrating that capability during the conflict. Despite an expected reopening agreement, Tehran retains missiles, drones, fast boats and mining capabilities that could disrupt global energy flows. Intelligence officials say Iran has gained leverage over a critical trade route and could use regional energy infrastructure as a pressure tool.
“These forecasts have been abysmal. My dots wouldn’t be perfect either, so I wouldn’t give them.”
Fed Chairman Kevin Warsh has spent 15 years arguing the central bank says too much. Wednesday is his first meeting. My story on the quiet revolution he wants: