Strategy Defends STRC Peg with $176M Buyback Amid Bitcoin Slowdown
Strategy spent $176.3 million defending the $100 peg of its STRC preferred stock in the first four days of October, while only adding 334 Bitcoin (BTC) to its holdings. The company's latest filing reveals a pattern of prioritizing STRC buybacks over Bitcoin purchases, with $817.6 million spent on STRC repurchases compared to $247.1 million on Bitcoin over five weeks.
The average buyback price for STRC has increased each week, from $97.40 in early September to $99.39 by October 4. This reduces the effective return on retiring shares, but Strategy continues to defend the peg, which closed at $99.57 on October 5. The company has sold MSTR shares and used USD cash to fund the buybacks, with USD Cash dropping by 42% from $1.44 billion to $833.4 million in four weeks.
Strategy's approach resembles that of a stablecoin issuer defending its token's price. The company has also sold Bitcoin to fund STRC distributions, raising questions about its ability to continue accumulating Bitcoin. Shareholders will vote on October 28 on making STRC dividends accrue daily, which could further impact the company's cash reserves.
Key numbers to watch include the remaining $547.2 million buyback authorization, the USD Cash balance, and STRC's price. If STRC holds near $100 without heavy buying, Strategy may redirect cash toward Bitcoin. However, renewed slippage could pressure the daily-dividend structure from its first week.