{"id":74820,"date":"2026-07-01T20:24:35","date_gmt":"2026-07-01T20:24:35","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/farside-warns-strategys-12-strc-dividend-plan-could-weaken-investor-confidence\/"},"modified":"2026-07-01T20:24:35","modified_gmt":"2026-07-01T20:24:35","slug":"farside-warns-strategys-12-strc-dividend-plan-could-weaken-investor-confidence","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/farside-warns-strategys-12-strc-dividend-plan-could-weaken-investor-confidence\/","title":{"rendered":"Farside Warns Strategy\u2019s 12% STRC Dividend Plan Could Weaken Investor Confidence"},"content":{"rendered":"<p><b>(Originally posted on : Bitcoin News )<\/b><br \/>\n<\/p>\n<div>\n<div class=\"@container mb-[25px] rounded-sm overflow-clip py-0.5 pr-0.5 pl-2.5 bg-success-100\">\n<div class=\"flex flex-col gap-m overflow-clip rounded-[6px] !bg-success-10 p-3 @[420px]:p-m\">\n<h2 class=\"m-0 flex items-center gap-s text-[19px] !text-[#1c1c1c] md:text-[20px]\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"16\" height=\"10\" viewbox=\"0 0 16 10\" fill=\"none\" class=\"shrink-0 text-success-100\" aria-hidden=\"true\"><path d=\"M1 1.5h14\" stroke=\"currentColor\" stroke-width=\"2.5\" stroke-linecap=\"round\"\/><path d=\"M1 8.5h10\" stroke=\"currentColor\" stroke-width=\"2.5\" stroke-linecap=\"round\"\/><\/svg><span>Key Takeaways<\/span><\/h2>\n<ul class=\"m-0 flex list-none flex-col gap-m pl-0\">\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">Farside says STRC\u2019s $100 price mechanism may weaken if Strategy raises coupons.<\/span><\/li>\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">Strategy plans buybacks, a dollar reserve and possible BTC sales to manage risk.<\/span><\/li>\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">STRC traded near $75 before rebounding, with Farside urging buybacks or a shift toward SOFR.<\/span><\/li>\n<\/ul>\n<\/div>\n<\/div>\n<h2>Strategy Shifts Bitcoin Strategy as Farside Challenges STRC Price Support Model<\/h2>\n<p>Strategy\u2019s move to create a Digital Credit Capital Framework has sharpened scrutiny of one of its most complex financing tools: STRC.<\/p>\n<p>Farside Investors, a UK investment adviser, <a href=\"https:\/\/x.com\/FarsideUK\/status\/2070844434355286403\" target=\"_blank\" rel=\"noopener noreferrer\">argues<\/a> that STRC\u2019s price-stability mechanism is fundamentally unstable. The product was largely issued around $100, with a mechanism intended to guide the market price back toward that level.<\/p>\n<p>In theory, if STRC trades below $100, Strategy can raise the dividend to support the price. If it trades above $100, the company can lower the dividend. Farside says that structure creates a dangerous feedback loop. If investors become more concerned about Strategy\u2019s credit risk, STRC could fall. Raising the dividend to support the price could then increase cash strain and further weaken confidence.<\/p>\n<p>The firm also notes that the coupon is discretionary, not automatic. That gives Strategy flexibility, but it also creates uncertainty for investors trying to value the security.<\/p>\n<h2>Coupon Flexibility Creates Valuation Gap<\/h2>\n<p>Farside said borrowing at 11.5% to buy <span>bitcoin<\/span> looks unattractive on basic financial terms. Even if <span>bitcoin<\/span> performs well over the long term, it may not rise smoothly enough to cover that cost without forcing asset sales during weak markets.<\/p>\n<p>The analysis points to a sharp valuation split. If investors assume STRC keeps paying an 11.5% dividend in full, Farside\u2019s calculator values the instrument at about $144 using an 8% discount rate.<\/p>\n<p>But STRC is not a fixed-rate bond. Strategy has the right to lower the coupon by 25 basis points each month, potentially all the way down to Secured Overnight Financing Rate (SOFR), which Farside cites at around 3.6%. Under that assumption, the instrument is valued at about $55.<\/p>\n<figure id=\"attachment_827711\" aria-describedby=\"caption-attachment-827711\" style=\"width:1368px\" class=\"wp-caption aligncenter\"><a href=\"https:\/\/static.news.bitcoin.com\/wp-content\/uploads\/2026\/07\/farside-warns-strategys-12-strc-dividend-plan-could-weaken-investor-confidence.png?X-Amz-Content-Sha256=UNSIGNED-PAYLOAD&amp;X-Amz-Algorithm=AWS4-HMAC-SHA256&amp;X-Amz-Credential=AKIARQKIT2TMGZBKV2L6%2F20260701%2Fus-east-1%2Fs3%2Faws4_request&amp;X-Amz-Date=20260701T142749Z&amp;X-Amz-SignedHeaders=host&amp;X-Amz-Expires=600&amp;X-Amz-Signature=fa0255efa54baf4e4265be2e14fbcffc78e279432ca6825a1f6d807ddb894d8b\"><\/a><figcaption id=\"caption-attachment-827711\" class=\"wp-caption-text\">STRC Price \u2013 1 July 2026, 10:25 EDT. Source: Google Finance<\/figcaption><\/figure>\n<p>That gap explains why STRC is difficult to price. It was not issued at $55 or $144, but around $100, meaning investors were effectively buying into uncertainty over future coupon policy and the credibility of the price-stability mechanism.<\/p>\n<p>STRC has recently traded around $75, roughly 25% below its target price, before rebounding to $86. Farside said that suggests the stability mechanism is already failing, or at least no longer functioning as investors may have expected.<\/p>\n<h2>Strategy Moves From Buyer to Manager<\/h2>\n<p>The critique comes as Strategy adopts a broader capital <a href=\"https:\/\/news.bitcoin.com\/strategy-launches-2-55b-reserve-shield-as-mstr-plunges-30-and-bitcoin-hits-60k\/\">framework<\/a>. The company plans to build a U.S. dollar reserve, raise the STRC dividend to 12%, buy back preferred securities at a discount, and authorize <span>bitcoin<\/span> sales to help fund dividends and reserves.<\/p>\n<p>That marks a notable shift. For years, Strategy issued equity at a premium to its <span>bitcoin<\/span> holdings and used the proceeds to buy more <span>BTC<\/span>. With the stock now trading closer to the value of its holdings, that machine is less effective.<\/p>\n<p>Andrei Grachev, managing partner at DWF Labs, said the company is no longer simply a one-way <span>bitcoin<\/span> buyer. He described the change as a managed shift rather than a fire sale, but one that turns the largest source of corporate <a href=\"https:\/\/www.binance.com\/en\/price\/bitcoin\" class=\"lar_link lar_link_outgoing\" target=\"_blank\" rel=\"noopener noreferrer\">bitcoin<\/a> demand into a potential seller. He commented:<\/p>\n<blockquote>\n<p style=\"text-align:left\">Strategy is doing something with <a href=\"https:\/\/www.binance.com\/en\/price\/bitcoin\" class=\"lar_link lar_link_outgoing\" target=\"_blank\" rel=\"noopener noreferrer\">bitcoin<\/a>: shifting it from a reserve you simply hold and never touch, to one you actively manage, selling, buying back, and funding when it serves the balance sheet. The asset stays central; the discipline around it changes completely.<\/p>\n<\/blockquote>\n<p>Farside sees two likely long-term solutions: buy back STRC or abandon the price-stability mechanism and move the coupon toward SOFR. Doing nothing may be easier in the short term, but the firm says it only delays the problem.<\/p>\n<p>For <a href=\"https:\/\/www.binance.com\/en\/price\/bitcoin\" class=\"lar_link lar_link_outgoing\" target=\"_blank\" rel=\"noopener noreferrer\">bitcoin<\/a> treasury companies, the message is clear. The market is moving from accumulation at any cost to balance-sheet discipline, <a href=\"http:\/\/www.bitcoin.com\/get-started\/what-is-liquidity\/\" class=\"lar_link lar_link_outgoing\" target=\"_blank\" rel=\"noopener noreferrer\">liquidity<\/a> management, and investor trust.<\/p>\n<\/p><\/div>\n<p><a href=\"https:\/\/news.bitcoin.com\/farside-warns-strategys-12-strc-dividend-plan-could-weaken-investor-confidence\/\">Source link <\/a><br \/>\n<br \/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>(Originally posted on : Bitcoin News ) Key Takeaways Farside says STRC\u2019s $100 price mechanism may weaken if Strategy raises coupons. Strategy plans buybacks, a dollar reserve and possible BTC sales to manage risk. STRC traded near $75 before rebounding, with Farside urging buybacks or a shift toward SOFR. Strategy Shifts Bitcoin Strategy as Farside [&hellip;]<\/p>\n","protected":false},"author":3947362377,"featured_media":74821,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0},"categories":[32],"tags":[],"_links":{"self":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts\/74820"}],"collection":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/users\/3947362377"}],"replies":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/comments?post=74820"}],"version-history":[{"count":0,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts\/74820\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/media\/74821"}],"wp:attachment":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/media?parent=74820"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/categories?post=74820"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/tags?post=74820"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}