STRC BROKE $80. CAN'T THE PARTY COPY

TL;DR

• STRC, after falling at a nominal value of $100, gave a higher return on the surface, essentially by repricing Strategy's financing capacity。

• IT IS NOT IN THE TRADITIONAL SENSE OF PONZI, NOR IS THERE AN IMMEDIATE THUNDERSTORM DUE TO A DROP IN FACE VALUE, BUT THE CASH DIVIDENDS, THE FINANCING WINDOW AND THE BTC PRICE JOINTLY DETERMINE RISK。

LINKED TARGETS: STRC, MSTR, BTC, OTHER STR SERIES PRIORITY UNITS。

THE MOST ATTRACTIVE THING ABOUT THE STRC LATELY IS THAT IT LOOKS LIKE A "FACING TICKET." THE NOMINAL VALUE OF $100, THE CURRENT ANNUALIZED DIVIDENDS RATE OF 11.50 PER CENT, FELL TO $75-89 IN MID-JUNE. AT THIS PRICE, THE APPARENT RATE OF RETURN IS RAISED TO 13-15%。

The problem is here too. The market does not, for no reason, hit a target anchor with a priority of $100 to the nearest 80%. This discount is not simply a liquidity discount, but rather a more acute question for Strategy: can the capital market buy BTC's flying wheels and cover the growing cost of money

Strategy sold 32 BTCs at the end of May, resulting in a net gain of approximately $2.5 million, which is expected to cover the distribution of priority units. The amount is small, but the signal is not small. It turns SRC from "finance innovation" to a more realistic investment issue: if it is bought now, is it a copy of the high-interest asset, or is it taking the most vulnerable layer of the MSTR structure

STRC, ISN'T IT PONZI

LET'S START WITH THE CONCLUSION THAT STRC IS NOT THE TRADITIONAL PONZI。

At the heart of the Pond structure is the payment of returns to early investors with the money of the late, not supported by sufficient assets and cash flows. The situation is different for Strategy. The company actually owns a large number of BTCs, and the number of open warehouses has increased to about 84.77 million. STRC is also not a property subject to a firm commitment, but a variable interest rate A series of permanent priority shares, with legal attributes closer to equity and no fixed maturity date。

This is also the bottom logic that Saylor and Strategy management have been emphasizing: the company is not profiting from empty gloves, but is making BTC reserves into a capital market structure. Ordinary, reversible and priority shares attract different funds, respectively, and the money raised continues to buy BTC. As long as BTC increases over time, the net value of corporate assets increases, and financing instruments are accepted by the market, the machine can continue。

But "not Ponzie" is not "no Ponzie risk"。

The danger of STRC is that it pulls the MSTR BTC narrative back into cash flow. Ordinary shares can talk about long-term premiums, debt swaps can talk about swing space, and STRC needs cash dividends. Current nominal dividends of 11.50 per cent are returns to investors and ongoing costs to Strategy。

IF THESE DIVIDENDS ARE NOT COVERED FOR A LONG TIME BY CASH FLOWS FROM SOFTWARE OPERATIONS, CASH RESERVES OR LOW-COST REFINANCING, BUT RATHER BY INCREASING RELIANCE ON NEWLY ISSUED SECURITIES OR ON THE SALE OF BTC, THE STRUCTURE BECOMES UGLY. IT MAY NOT BE LEGAL, BUT THE MARKET WILL RE-PRICING IT ON THE BASIS OF "FINANCIAL WORK REQUIRING CONTINUED LIFE"。

SO TO JUDGE WHETHER OR NOT THE STRC CAN COPY, THE FIRST LEVEL IS NOT ABOUT HOW HIGH THE RATE OF RETURN IS, BUT ABOUT WHERE IT COMES FROM. IF THE RATE OF RETURN COMES FROM SHORT-TERM PANIC, IT MAY BE AN OPPORTUNITY. IF THE RATE OF RETURN COMES FROM THE MARKET AND THE STRUCTURE IS CONSIDERED TO HAVE TO BE INCREASINGLY EXPENSIVE TO FINANCE, THE DISCOUNT IS NOT CHEAP, BUT RISK COMPENSATION。

What's the main reason for the breakout

THE ANCHOR OF STRC IS A $100 NOMINAL VALUE. DECLINED FACE VALUE INDICATES THAT THE MARKET IS RELUCTANT TO HOLD IT AT PRICES CLOSE TO FACE VALUE. THERE ARE THREE MAIN REASONS。

THE FIRST LAYER, THE BTC AND MSTR PREMIUMS ARE CHARGED AT THE SAME TIME。

The MSTR ship relies on mNAV, which is the premium of the stock price against the net holding value of the currency. As long as the MSTR share price is higher than its BTC net asset value, the company will be able to issue shares or other securities more efficiently and buy the BTC with funds. This cycle is going well in the cattle market because the BTC rises and pushes up net values, and the MSTR premium spreads and increases the efficiency of financing。

BUT IF BTC CROSSES OR FALLS, THE MSTR PREMIUM NARROWS, THE EFFICIENCY OF FINANCING DECREASES. STRC IS NOT AN ISOLATED HIGH-INTEREST ASSET; IT IS A FINANCIAL LAYER IN THIS FLYING WHEEL. WHEN MARKETS SUSPECT THAT THE WHEEL IS SLOW, THEY DEMAND A HIGHER RATE OF RETURN。

THE SECOND FLOOR, THE STRC ITSELF IS BLOCKED BY THE DISTRIBUTION MECHANISM。

The original design goal of STRC is to make the price as close as possible to $100. Companies can continue to issue small volumes on the market to provide long-term capital for Strategy. But when secondary market prices fall to more than $80, it becomes difficult to continue to issue at near face value. In June, CoinDesk reported that company-related distribution arrangements had been suspended following the fall of the STRC。

This will create a reverse feedback. Prices are lower than nominal values and new issuances become difficult. The distribution has become difficult and the finance channel has been narrowed. Finance corridors are narrow and markets are more concerned about the pressure of cash dividends. Fearing that prices would continue to fall below nominal values when they became larger。

THE THIRD LEVEL, THE COMPETITION SATA TOOK THE SAME MOBILITY。

STRC IS NOT LOOKING FOR ORDINARY EQUITY FUNDS, BUT RATHER FOR FUNDS THAT ARE WILLING TO BUY HIGH INTEREST, FIXED EARNINGS AND THAT ARE ABLE TO ACCEPT BTC TREASURY RISKS. THIS POOL IS NOT UNLIMITED. WHEN THERE'S A COMPETITION IN THE MARKET FOR THE SAME KIND OF REVENUE-ORIENTED FUNDS, THE STRC IS NO LONGER THE ONLY OPTION。

FOR INVESTORS, MONEY FLOWS TO THE SIDE OF HIGHER RETURNS, STRONGER LIQUIDITY OR CLEARER TERMS. AFTER SIPHONING OFF LIQUIDITY, STRC, IN ORDER TO MAINTAIN ITS $100 FACE VALUE, NEEDS TO OFFER MORE ATTRACTIVE PRICES OR COMPENSATION FOR EARNINGS. THE DISCOUNT IS NOT SIMPLY DUE TO MARKET PANIC, BUT MAY ALSO BE DUE TO THE REDISTRIBUTION OF FUNDS BETWEEN THE SAME PRODUCTS。

On the fourth floor, the payment of currency broke the psychological anchor of "buy and sell."。

THIRTY-TWO BTCS WERE SOLD AT THE END OF MAY. IN MORE THAN 840,000 BTC HOLDROOMS, ALMOST NEGLIGIBLE. BUT MARKET SENSITIVITY IS NOT QUANTITY, BUT USE. THE DOCUMENTATION CALIBRE INDICATED THAT THE FUNDS WERE EXPECTED TO BE USED FOR THE DISTRIBUTION OF PRIORITY UNITS, WHICH THE MEDIA FURTHER INTERPRETED TO INCLUDE THE STRC SHARE。

This has led investors to think of a problem that they did not want to think about: If the financing window continues to narrow, will the payment of currency be changed from a one-time operation to a regular option

STRC BROKE DOWN, NOT BECAUSE OF A $2.5 MILLION SALE, BUT BECAUSE IT SHOWED THE MARKET THE NEGATIVE SIDE OF THE MSTR. IN THE CATTLE MARKET, THE FINANCING OF CURRENCY PURCHASES WILL MAGNIFY THE RISE. IN A STRESS ENVIRONMENT, INTEREST PAYMENTS AND REFINANCING ALSO MAGNIFY SUSPICIONS。

In what case

STRC is not much like a leverage slot that'll be liquidated overnight. It does not have a fixed maturity date, and dividends are not mandatory currency exchange like debt interest. Most of Strategy's debt was not mortgaged by BTC, and the risk of a guaranteed warehouse was traditionally low。

The real thunderstorm is more likely to be a continuous collapse of confidence and financing capacity。

The first pressure came from the BTC itself. If the BTC enters Deep Bear City, the mNAV of MSTR is pressed close to one, even breaking one, and Strategy's best way of financing fails. The lower the average share premium, the more difficult it is to say that the increase in the value of the money is "better BTC" and that investors will see more of a dilution。

THE SECOND PRESSURE COMES FROM THE PRICE OF STRC. IF IT STAYS IN THE 70-80 DOLLAR ZONE FOR A LONG TIME AND IS UNABLE TO RETURN TO THE VICINITY OF $100, THE MARKET IS NOT PASSING SHORT-TERM MISKILL, BUT RE-COSTING. THE DEEPER THE DISCOUNT, THE HIGHER THE PREMIUM THE ISSUER WILL HAVE TO PAY TO CONTINUE USING IT FOR FINANCING。

The third pressure is cash dividends. STRC 11.50 per cent nominal dividends, high ticket rates for buyers and high cash costs for Strategy. By rough caliber, the associated priority annualized cash dividends pressure is already a billion dollars in volume, which is not a readily digestable figure for traditional software operations。

THE LAST PRESSURE IS TO CHANGE MONEY SALES FROM AN OCCASIONAL TO A PATTERN. THE SALE OF 32 BTCS CAN ALSO BE INTERPRETED AS BALANCE SHEET MANAGEMENT, BUT THE MARKET WOULD REDEFINE THE WHEEL IF MORE OF THE FUTURE DIVIDENDS WERE TO COME FROM BTC. IT USED TO BE FINANCING TO BUY BTC, AND NOW IT'S SELLING BTC TO PAY FOR IT, AND IT'S GOING THE OTHER WAY。

THESE FOUR THINGS, IF THEY APPEAR ALONE, DO NOT NECESSARILY CONSTITUTE A THUNDERSTORM. THE REAL DANGER IS THAT THEY HAPPEN AT THE SAME TIME. BTC FALLS, MSTR PREMIUMS CONTRACT, STRC DEEP DISCOUNTS, CASH DIVIDENDS NEED TO BE SUPPLEMENTED BY CURRENCY SALES. AND THEN THE QUESTION IS NO LONGER WHETHER STRC HAS A 15% RETURN, BUT WHETHER THIS 15% IS SUFFICIENT TO COMPENSATE FOR THE CONTINUED DISCOUNT ON PRINCIPAL AND THE DEFERRED RISK OF DIVIDENDS。

In other words, the flashpoint of STRC is not a single price, but a financial narrative. As long as the market still believes that Strategy can get the money, hold the BTC and keep the priority shares at acceptable cost, there is still room for repair. Once the market no longer believes, the priority shares will show a discount on trust earlier than the normal shares。

Every bear must be taken away

The encrypted market has a familiar script for each bear market: the most favourable financial structure in the cattle market, which becomes the most stressful place in the next cycle。

The last round of exchanges, lending platforms and high-yielding property items were "lifted". Their problems are not exactly the same, but the common denominator is that in cattle markets, rising mobility and confidence are the norm. When prices fall, ransom increases, and finance becomes more expensive, the parts of the structure that are most dependent on continuous inflows are exposed。

MSTR and STRC are not the same thing. Strategy has a real BTC reserve, listed companies disclose more transparently, and preferred shares are not chained to high-yielding pools. It is not accurate to draw the same number as the previous mine project。

BUT THE MARKET IS ASKING NOT WHETHER IT IS THE NEXT FTX, BUT WHETHER THIS BEAR MARKET WILL TAKE AWAY A BTC TREASURY FINANCE MODEL。

STRC IS JUST IN THE MIDDLE OF THIS. FOR THE OPTIMISTS, IT FELL TO THE VICINITY OF $80, WHICH MEANS BUYING A HIGH-INTEREST PRIORITY STOCK AT A DISCOUNT SUPPORTED BY A LARGE BTC RESERVE. AS LONG AS THE BTC BOUNCES, THE MTR PREMIUM IS RESTORED, THE STRC RETURNS TO THE FACE VALUE, AND INVESTORS CAN EARN BOTH INTEREST AND CAPITAL GAINS。

FOR PESSIMISTS, THE SRC DISCOUNT IS NOT A MISTAKE, BUT AN ADVANCE DOWNGRADING OF THE MARKET TO THE MSTR FINANCE MODEL. IT SHOWS THAT REVENUE-BASED FUNDS ARE RELUCTANT TO BE CHARGED $100, THAT HIGH-INTEREST FINANCING IS NO LONGER CHEAP, AND THAT BTC TREASURY’S “DIGITAL CREDIT LAYER” WILL ALSO BE TESTED BY BEAR CITY。

SO CAN THE STRC COPY, THE ANSWER DEPENDS ON WHAT THE BUYER IS BETTING ON。

If the bet is short-term price repair, the core observation is whether STRC can re-engage with $100, whether mNAV of MSTR has stopped falling and whether the BTC has re-opened the top space. If there is a long-term interest rate, the risk that dividends may be deferred, prices may be depreciated over a long period of time and rates of return may continue to rise。

More directly, STRC is not a risk-free high for everyone. It's more like a high-interest ballot on the ability of Saylor to cross Bear City. Buying it is not buying ordinary bonds, but keeping the bet market willing to continue to trust the accounts of the MSTR's BTC Treasury。

IS IT TRUE THAT THIS ROUND "LIFT ONE" CANNOT BE CONCLUDED YET? BUT STRC HAS GIVEN THE EARLY SIGNAL THAT WHEN BTC TREASURY BEGAN TO BUILD UP HIGH-YIELDING LAYERS WITH PRIORITY SHARES, BEAR CITY WAS TESTING NOT JUST THE PRICE OF MONEY, BUT WHO COULD GET IT AT A SUFFICIENTLY LOW COST。