On 29 September 2026 Michael Saylor published a text titled "How Strategy Engineers Digital Credit". Bitcoin is digital capital, he writes, the MSTR share digital equity, the preferred stock STRC digital credit. Strategy manages the whole balance sheet so that the credit stays stable and the share carries the bitcoin leverage.
It reads like a concept for the future. It is a description of what Strategy did in the three months before. Over the summer the model was seriously tested for the first time. If you hold STRC or MSTR, or are thinking about buying either, you can now check what the levers did in practice.
In June it got tight
On 9 June 2026 Shawn Tully wrote in Fortune that Strategy's preferred stock threatened to trigger a death spiral. Dividends were being paid with ever more preferred shares, and Saylor's only option appeared to be issuing more of them. In the spring Peter Schiff had called the business model "structurally unstable": bitcoin yields nothing, so sooner or later Strategy would have to sell bitcoin.
Two weeks later they looked right. On 26 June STRC closed at $74.57, a quarter below the $100 stated amount on which its dividend is calculated. MSTR closed at $82.31, 47 percent lower than a month earlier. At around $60,000, bitcoin was a fifth below the average price Strategy had paid for its coins. For the second quarter Strategy reported an $8.32 billion loss on its bitcoin.
If the story had ended there, the critics would have been right.
At the end of June, digital credit traded at 75 cents on the dollar.
What did Strategy do next?
Strategy did not raise the rate. It rebuilt the balance sheet.
The obvious lever would have been a higher dividend rate to make STRC attractive again. Strategy raised it by just half a point, from 11.5 to 12 percent. On 29 June the company said in a mandatory filing that it would "not necessarily" raise the rate just because STRC trades below $100.
Instead, the same day brought a five-part package: a dollar reserve with rules, a new dividend policy, a repurchase program for preferred stock, one for MSTR shares, and authorisation to sell bitcoin. Over the following three months and a bit, from 29 June to 4 October, the work looked like this:
| Lever | 29 Jun – 4 Oct 2026 |
|---|---|
| new MSTR shares sold | 50.4 m shares for $5.42 bn (avg $107.62) |
| STRC repurchased | 15.0 m shares for $1.45 bn (avg $96.59) |
| bitcoin sold | 6,916 BTC for $429 m (June to August) |
| bitcoin bought | 7,552 BTC for $617 m (August to October) |
| new preferred stock issued | none |
| dollar reserve plus freely usable dollars | from $2.55 bn to $5.71 bn |
Fortune had expected Strategy to issue more preferred stock. There is less of it: $1.50 billion of STRC stated amount has left the market, and with it $180 million of dividends a year.
Instead of new credit there were new shares. Instead of bitcoin fire sales there were buybacks.
Was that enough?
STRC is back, and the dividend never stopped
| 26 Jun 2026 | 5 Oct 2026 | |
|---|---|---|
| STRC | $74.57 | $99.48 |
| MSTR | $82.31 | $164.43 |
| bitcoin | $60,097 | $85,767 |
| Strategy's bitcoin holdings | 847,363 (28 Jun) | 848,000 (4 Oct) |
| bitcoin vs Strategy's cost ($75,441) | below | 14 % above |
| dollar reserve | $2.55 bn (5 Jul) | $4.88 bn (4 Oct) |
STRC has recovered a third from its low, and MSTR has doubled. For the third quarter Strategy estimates a $20.91 billion gain on its bitcoin, after an $8.32 billion loss in the second. The dividend was not suspended in any month, and since July it has been paid twice a month. The reserve, which exists only for dividends and interest, covers almost three years at payments of about $1.76 billion a year. In June, Fortune had counted on a billion that would not last twelve months.
And Strategy now holds 637 more bitcoin than before the low. It did sell, yes, but it bought back more.
The dividend arrived every month of the summer, even when STRC stood at $75.
Who paid for it?
The shares took the hit
Strategy holds as many bitcoin as in June, but spread across far more shares. On 30 June there were 371.6 million MSTR shares; in early October, by calculation, about 422 million.
| 30 Jun 2026 | 4 Oct 2026 | |
|---|---|---|
| bitcoin per 1,000 MSTR shares | 2.277 | 2.010 (calculated) |
Each share now stands for 12 percent less bitcoin. That explains why MSTR has gained only 6.6 percent since the end of May, while bitcoin rose 15.2 percent over the same period.
Saylor says so openly in his text: the capital structure directs more of bitcoin's volatility toward the common equity so that the credit stays more stable. "Amplification works in both directions." Over the summer, that was not theory.
Two more costs. STRC has not closed at $100 on any day since 14 May. And the buybacks came late: the first ran at the end of July at $86.52, the average of all buybacks is $96.59, and the latest ran in early October at just over $99. Strategy earned little from the deep discount, $51 million in total.
STRC holders were protected, and MSTR holders paid for the protection. That is how the model is built.
What does Saylor's text say about the next steps?
What Saylor describes, and what was already running over the summer
| Saylor's lever | summer 2026 |
|---|---|
| issue MSTR to raise dollars | $5.42 bn raised, reserve nearly doubled |
| repurchase STRC below par | $1.45 bn; program raised from $1 bn to $2 bn on 8 Sep, $0.55 bn left |
| issue STRC above par | not possible, no close at $100 since May |
| separate reserve (for payments) from cash (for investment) | reported separately since August: $4.88 bn and $0.83 bn (4 Oct) |
| sell bitcoin selectively when that beats other routes | 6,916 BTC sold, more bought back later |
| dividend rate as one tool among several | +0.5 points; 12 % stays until STRC trades "sustained" near $100 |
| improve the security itself | two payments a month since July; daily dividend up for a vote on 28 Oct |
Almost everything Saylor describes was already used over the summer. One lever is still missing: issuing new STRC above $100. That is the lever Strategy used before the summer to buy bitcoin without selling new shares.
The text is not an announcement. It is the manual for what already happened over the summer.
The obvious objection
"Strategy sold bitcoin. That breaks the promise never to sell."
Between the end of June and August, Strategy sold 6,916 bitcoin to pay dividends and fund buybacks. Since the end of August it has bought 7,552. In June, according to Cointelegraph, Saylor himself said that if the company's policy is never to sell bitcoin, the credit has no value. Whoever builds credit on bitcoin must be able to sell bitcoin in an emergency. What matters is that the holdings are not smaller afterwards.
What comes next
On 28 October shareholders vote on whether STRC and the three other preferred stocks will accrue a dividend every calendar day, weekends included, paid on the next business day. For STRC the first daily payment would come on 2 November. The rate stays at 12 percent until STRC trades sustainably near $100.
The real turning point is a different one. If STRC trades at or above $100 again for good, Strategy can sell new STRC instead of new shares. Then credit buys the bitcoin, not shareholder dilution. There is room for it: $17.5 billion of STRC is registered for sale and unused.
The summer showed that the credit holds. The autumn will show whether it can grow again.
What this means for you
If you hold STRC: the stress test showed how Strategy responds. Not with a rate jump, but with reserves, buybacks and new shares. Your protection depends on Strategy being able to sell MSTR shares. As long as it can, the reserve is the strongest argument: almost three years of payments.
If you hold MSTR: you own the leverage on bitcoin and the company building the credit. Over the summer you were also the buffer. The number that shows it is bitcoin per share, not the share price.
Three numbers show what comes next: STRC's price against $100 ($99.48 at the close on 5 October), the first new STRC issuance since May, and bitcoin per 1,000 MSTR shares (currently about 2.01). The open question is whether a daily dividend makes STRC useful enough for funds and banks that demand lifts the price above $100.
More on the mechanics: STRC & MSTR Explained · Tokenized STRC and the gross yield
FAQ
What is the difference between the USD Reserve and USD Cash? The reserve exists only for dividends and interest, at least twelve months of payments, and any other use requires the board. Strategy may use the cash for bitcoin purchases and buybacks. That way the same dollar is not counted twice.
Why does bitcoin per share fall when holdings stay the same? Because 50 million new shares were added. The money went into the reserve and STRC buybacks, not into bitcoin. That is good for STRC holders and not for the amount of bitcoin per share.
How are the roughly 422 million shares calculated? 371.6 million on 30 June according to the quarterly report, plus the 50.4 million Strategy sold up to 4 October according to its weekly filings. Other issuance, for example from employee plans, is not included.
What does a daily dividend mean? The dividend accrues on every calendar day and is paid on the next business day once declared. The annual rate does not change, only the rhythm. It does not create a daily redemption right.
Not investment advice, not a recommendation, not a forecast — historical patterns are no guarantee.
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