When Strategy issued its first perpetual preferredPerpetual PreferredFixed-income instrument with no maturity that pays a fixed dividend, ranking ahead of common shareholders.View term → in January 2025 — STRK, with an 8% dividend — it opened an entirely new market: fixed-income instruments with indirect exposure to the largest Bitcoin balance sheet in the world.
The logic for the investor is simple. Buying Strategy stock (MSTR) means taking on all of Bitcoin's volatilityVolatilityThe magnitude of the swings in Bitcoin's price over a given period.View term → amplified by the company's leverage. Buying a Strategy perpetual preferred means receiving a fixed, predictable dividend, while the risk is bounded to the company's ability to keep paying that dividend.
Preferreds are neither stocks nor bonds in the traditional sense. They have features of both: like bonds, they pay a fixed coupon. Like preferred equity, they are perpetual (no mandatory maturity) and subordinate to debt but above common shareholders in a liquidation.
Today, Strategy has four active issues. STRK at 8% quarterly, the first and most liquid. STRF at 10%, launched in March 2025 for investors seeking higher yield. STRC at 12% with two payments a month (monthly until June 2026), designed to enable continuous ATM offerings. And STRD at 10%, the most recent. You can track all of them in the preferreds hub.
The par value of each is $1,000 per preferred share, implying annual payments of $80 to $115 per share depending on the instrument. STRC's monthly payment ($9.58 a month) makes it the most interesting instrument for investors seeking regular cash flow.
What is the real risk? Not that Bitcoin falls. STRK's dividend is not tied to the price of Bitcoin: Strategy pays it with the capital it raises from new issuance. The risk is that Strategy can no longer issue new capital (because the market closes, investors lose confidence, or regulatory conditions change) and then cannot keep up the payments.
In that extreme scenario, preferred holders would have priority over common shareholders in a liquidation. With 766,000 BTC on the balance sheet, coverage is substantial even at prices well below current levels. Our stress test models exactly that.
For the investor who believes in Bitcoin but doesn't want to sleep with MSTR's volatility, Strategy's preferreds are an elegant solution. It is not Bitcoin. It is not traditional fixed income. It is something new: debt backed by the largest accumulation of digital scarcityScarcityFixed maximum supply of 21 million Bitcoin, impossible to alter under the current protocol.View term → in the world.
