Institutional investors are increasingly viewing Strategy’s STRC preferred stock as a mainstream income product rather than a specialized cryptocurrency-linked investment.
With a combined investment of $756 million, STRC has amassed the largest holding among the three main U.S. preferred stock exchange-traded funds (ETFs): BlackRock’s PFF, Virtus InfraCap’s PFFA, and VanEck’s PFXF.
Why is this a bullish sign?
This is noteworthy because these ETFs are frequently looking for steady income.
Hence, by allocating a significant amount of their portfolios to STRC, ETF managers have now exposed millions of investors to Strategy’s credit products.
This shows that, despite Strategy’s close ties to Bitcoin [BTC], the market is beginning to regard it as a reliable issuer of fixed-income securities.
Concerns and crictism remains
Interestingly, this occurs even though, at the time of publication, STRC was trading at $86.88, below the $100 mark. Furthermore, adding more stress to the matter, Phong Le, the current CEO of Strategy, stated that the retail side saw a decline in numbers.
As predicted, forever Bitcoin critic Peter Schiff used this opportunity to attack Strategy and said,
Yes, but that means retail investors sold for a loss. My guess is the institutional buyers bought in for a short-term trade only. Or maybe they shorted MSTR and bought STRC as a spread trade. Maybe they bought STRC and shorted Bitcoin. None of those trades are bullish bets.
Is the broader market helping STRC?
While all of this is going on, Bitcoin, which was trading near $65k, declined by 2.28% in the past day and was back at $63,934.94 at press time.
This further coincided with Strategy deciding to increase its USD holdings by an additional $225 million, bringing its total cash reserves to $3.2 billion. But rather than displaying a bullish sign, this has injected concerns in the market.
Because, as long as STRC remains below the crucial $100 level, AMBCrypto’s recent analysis confirms that Strategy’s capacity to raise new funds through its ATM program for further Bitcoin purchases is still limited.
Final Summary
- With $756 million invested in STRC by big institutional investors, Strategy’s preferred stock is gaining traction.
- However, with the drop in retail participation, Peter Schiff has taken a jab at Strategy’s STRC.