Here is why Strategy's dividend-paying crypto stock is crashing to near-historic lows

Strategy's (MSTR) dividend-paying preferred stock, STRC, closed at $91.79 on Tuesday, its third-lowest since trading began in July 2025, amid lower bitcoin prices and debt concerns.

The only lower closes occurred during two sessions later that month, when STRC fell to as low as $88.60. The security was initially priced at approximately $90 in its debut.

STRC was designed to trade as close as possible to its $100 par value. However, it has remained below that level for an extended period and has not traded at $100 since May 15, last month's ex-dividend date.

Historically, STRC would trade near its $100 par value ahead of the ex-dividend date, the cutoff after which new buyers are no longer entitled to the upcoming dividend. Once the stock went ex-dividend, it often declined by roughly the value of the dividend before gradually recovering toward par, but on June 15, STRC never reached par.

Several factors appear to be contributing to STRC's persistent weakness.

First, the security has historically traded in tandem with bitcoin, and bitcoin remains under pressure, hovering around $65,000 and roughly 50% below its October all-time high.

Second, concerns have emerged around dividend coverage. Strategy currently has approximately seven months of dividend payout remaining after using part of its cash reserves to repay $1.5 billion of convertible debt. Prior to that repayment, the company's cash position provided up to 24 months of dividend coverage.

At the same time, investors have increasingly gravitated toward a competing product from another bitcoin treasury peer, Strive (ASST). Strive's bitcoin-backed preferred security, SATA, continues to trade close to its $100 par value, offering a higher annualized yield of approximately 13%, compared with STRC's 11.5%.

SATA also pays daily dividend payments rather than bi-monthly distributions. In addition, Strive doesn't have any debt outstanding. As a result, SATA sits at the top of the capital structure and is not obligated to convertible debt holders, a feature that may be particularly attractive to income-focused investors.

The spread between the two securities has widened significantly. STRC currently trades at a roughly $8.20 discount to SATA, the largest gap on record, as SATA trades at $99.99.

Based on STRC's current dividend rate and market price, its annualized yield stands at approximately 12.53%, calculated as annual dividend payments divided by the current share price. The market may be signaling that STRC's dividend rate needs to increase by about 100 basis points to restore demand and bring the security closer to its intended $100 par value.