Strategy's 'Digital Credit' Approach Yields Dollar Income from Bitcoin
Michael Saylor, executive chairman of Strategy (NASDAQ: MSTR), explained how his firm's 'Digital Credit' approach treats Bitcoin as long-duration capital. The company engineers a separate income product from this base, allowing common shareholders to retain leveraged exposure to further coin accumulation.
The preferred shares, led by the variable-rate Stretch instrument known as STRC, are designed to damp price swings and shorten effective duration while delivering a dollar yield. Strategy separates its dollar balances by purpose, with a dedicated USD Reserve reserved for preferred dividends and interest on outstanding debt.
Issuing common shares can add Bitcoin without creating a new senior payment claim, or it can bring in dollars to bolster reserves or retire existing claims. Management weighs each issuance against dilution and long-term value per share.