Bitcoin (BTC) has fallen below $60,000, trading at $59,900 with a 2.76% decline in the last 24 hours, intensifying stress on the cryptocurrency market. Investor concerns are now centered on the sustainability of Strategy’s Bitcoin financing model, which relies on raising capital through common shares, preferred stock, and other securities to buy Bitcoin.
While this approach helped Strategy build one of the largest corporate Bitcoin treasuries, falling crypto prices and rising financing costs are testing its durability. The company’s preferred stock, STRC, has become a key pressure point. Designed to attract income-focused investors via monthly dividends while funding Bitcoin purchases, STRC has dropped from $100 to around $75, leaving many investors with unrealized losses.
The yield on STRC has risen as demand weakened, potentially increasing Strategy’s cost of capital and reducing its future Bitcoin buying capacity. This, in turn, could dampen institutional demand for the cryptocurrency. Alex Blume, founder and CEO of Bitcoin asset management firm Two Prime, noted that Strategy’s recent downtrend reminds investors of past corrections. “The recurring issues at Strategy are unsettling the market and evoking memories of previous major crises in the cryptocurrency space,” he said.
Adding to the unease, Strategy disclosed its first Bitcoin sale since 2022—a modest 32 BTC. However, the move broke founder Michael Saylor’s long-held “never sell Bitcoin” policy, signaling a potential shift in strategy. Analysts stress that STRC is not a traditional bond; it lacks a fixed maturity date, is not secured by Bitcoin collateral, and dividends may be cut or eliminated by the board. This makes the investment riskier than many income-focused investors originally anticipated.
Andrejica Cobeljic, head of derivatives trading at Amina Bank, explained that the recent pullback is partly due to cyclical weakness, but more importantly reflects fading confidence in Strategy’s model. “The immediate trigger for this leg of Bitcoin’s decline is weakening market cycles, but the deeper underlying force is the erosion of credibility in Strategy’s approach,” he said.
As retail participation cools and institutional demand for Bitcoin slows, the sentiment shift below $60,000 underscores that market confidence now hinges not only on price action but also on the vitality of Strategy’s financing engine.