STRC Volatility Falls Below SPY, a Milestone for Digital Credit

Michael Saylor claims that Strategy's Variable Rate Series A Perpetual Stretch Preferred Stock (STRC) has become steadier than the SPDR S&P 500 ETF Trust (SPY), with a 30-day historical volatility of 9% compared to SPY's 10%. This milestone, according to Saylor, is significant for digital credit.

The comparison was deliberate, as Saylor aimed to demonstrate that STRC and Strive's SATA are competing with private credit, high-yield bonds, and bond ETFs for income allocations. He also made the case for Strive, stating 'I want every well-managed issuer of Bitcoin-powered Digital Credit to succeed.'

Saylor's statement is a reflection of his three-tier framework for Bitcoin treasury companies, which categorizes Bitcoin as digital capital, STRC and SATA as digital credit, and common stock as digital equity. The preferred, according to Saylor, belongs in an income investor's bond sleeve, not in a crypto allocation.

STRC's volatility has decreased significantly since March, when it was measured at 2% compared to the Vanguard Total Bond Market ETF (BND) at 6%. Now, STRC sits above BND. The gap between long-term asset returns and financing costs is not locked-in, Saylor emphasized, but rather must be earned through management.