Strategy Defends STRC's $100 Stock Price with $108.6M Bitcoin Sale

Strategy has spent six weeks defending STRC's $100 stock price. In June, it announced a Digital Credit Capital Framework to keep the price between $99 and $100. The company repurchased 288,930 STRC shares for about $25 million in July and sold $108.6 million worth of Bitcoin to buy more STRC shares in early August.

Solstice built its risk model on Strategy's policy and has a tranched product that splits exposure into two tokens: SR-strcUSX and JR-strcUSX. The senior tranche, represented by SR-strcUSX, absorbs losses only after the junior tranche, represented by JR-strcUSX, is exhausted.

The senior tranche has a 7% annual percentage yield (APY) target return and will incur impairment if Strategy's Bitcoin treasury company cannot sustain preferred-stock defense funding indefinitely. The protocol has built-in stages to prevent coverage ratio deterioration before the senior tranche incurs any loss.