Strategy has accelerated Bitcoin buying in recent months, thanks to highly sought-after Stretch preferred stock [STRC]. In a recent interview, Strategy CEO Phong Le labeled the viral STRC product as the Ministry of Finance’s “iPhone moment.”
$STRC is our iPhone moment. $5 billion in cumulative sales in seven months, faster than virtually any product, including the iPhone.
For the uninitiated, Strategy has four types of preferred stock in its lineup, in addition to its main common stock, MSTR. These are all part of the capital structure, aimed at raising funds for the BTC purchases.
So far, STRC, a monthly variable return product, has been the most successful. It currently offers a yield of 11.5%. As Le said, the product debuted last July and has surpassed $5 billion in revenue.
For Le, Stretch is the “fastest growing product” and only second to BlackRock’s IBIT.
It took Apple iPhone two years to reach cumulative sales of $5 billion. Google Ads lasted four years. It took the gold ETF five years to raise $5 billion in net assets. But it took two months for BlackRock’s IBIT to reach $5 billion. So the only product that has grown faster than Stretch is IBIT.
Why 80% retail dominates STRC
On the huge market share of 80% of STRC retail, Le explained that this stock is less volatile compared to MSTR. As such, the retail industry is comfortable with the 10%-12% monthly returns with low volatility that STRC offers.
In contrast, MSTR can be 2x more volatile than BTC. Only institutional investors can handle the wild swings, plus the potential for higher risk-adjusted returns for long-term investments, Phong Le noted. In fact, MSTR ownership is dominated by institutional investors at 60%.
In other words, the products serve different markets with varying risk tolerances, and Strategy has been able to benefit from both sides.
That said, most of the proceeds from STRC sales end up purchasing BTC. On Tuesday, April 7, STRC helped fund 936 BTC from a $64.3 million sale.
Separately, Strategy announced a purchase of 4.8K BTC, bringing the total holdings to 766,970 BTC. STRC financed almost 70% of this latest purchase. On a year-to-date (YTD) basis, Strategy has acquired 94K BTC, or 2.2x BTC mined.
Meanwhile, the MSTR rose 5.6% to trade at $130 after market hours on Tuesday. This followed BTC’s 6% rise to over $72,000 following the US-Iran ceasefire.
Final summary
- Strategy’s CEO calls STRC the fastest growing product, calling it their “iPhone moment” after achieving record $5 billion in revenue in seven months.
- According to Phong Le, STRC is 80% dominated by retail as it is less volatile with a moderate monthly return of over 10%.