10.6% Yield With (Almost) No Volatility? Meet STRC

When most investors think of Strategy (formerly MicroStrategy), they think of volatility. Massive swings. Bitcoin exposure. No dividend.

STRC is the opposite.

STRC — Strategy’s 9.0% Series A Perpetual Stretch Preferred — currently yields about 10.6%, pays monthly, and is specifically engineered for low volatility. The goal isn’t capital appreciation. The goal is price stability around $100.

Let’s break down how that works — and where the income really comes from.

Distribution History

STRC launched in July 2025, so the history is short. We can ignore the first payment because it covered a partial month. Since then, monthly distributions have ranged from $0.83 to $0.88.

Using the most recent $0.875 distribution, annualized and divided by a recent price of $98.63, the yield works out to approximately 10.6%.

STRC has delivered steady monthly payouts between $0.83 and $0.88 since launch.

Unlike traditional preferred shares with fixed coupons, STRC’s distribution is variable. Broadly speaking, management has indicated it should approximate:

1-Month U.S. Treasury Yield + ~4.7% spread

Management targets a spread over short-term Treasuries to determine the dividend level.

That means if short-term rates fall, the distribution may fall. If rates rise, income may rise.

What Is STRC?

STRC is issued by Strategy — the largest corporate holder of Bitcoin, owning roughly 3% of total supply .

The company’s strategy is straightforward: issue preferred shares and use the proceeds to buy more Bitcoin.

Unlike Strategy’s common stock — which is highly volatile — STRC is designed to remain near $100 per share.

Since launch, STRC has traded in a tight range near $100, unlike other Strategy securities.

Between $99 and $101, management does nothing.
If the price drops below $99, they can raise the distribution or pause new issuance.
If the price rises above $101, they can lower the distribution (limited to 0.25% per month) or issue new shares.

STRC is callable at $101, which discourages investors from overpaying. It is also cumulative — missed payments would accrue.

Where Does the Income Come From?

Here’s the unconventional part.

Strategy’s software business does not fund the dividend. Bitcoin generates no cash flow.

Instead, Strategy uses an “ATM” (At-The-Market) issuance program — selling new STRC shares to raise capital. Some of that capital funds distributions.

That structure raises eyebrows. Selling new shares to pay existing holders sounds questionable. But it is fully disclosed in the prospectus and differs from a Ponzi scheme because there is a real asset backing the strategy: Bitcoin.

So far, Strategy has raised billions via preferred issuance — far more than the projected distribution obligations.

Still, this only works if Bitcoin continues to appreciate faster than the roughly 8–10% servicing cost of preferred capital.

Risks

1. Bitcoin must continue to rise long term.

2. The price-stability mechanism is untested in a severe market crash.

3. Excess leverage could pressure the balance sheet.

This is not a money market substitute.

My Take

STRC offers roughly a 5% premium over short-term Treasuries with intentionally low price volatility. That combination is rare.

However, the structure is unconventional. The pricing mechanism is new. And there is no timing advantage to rushing in now that shares trade near $100.

I don’t currently hold STRC, but I would consider a small allocation as a tactical income position — not a cash equivalent.

To learn more, click here for the full Review.

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