By Blu Putnam, Bayesian Edge — June 22, 2026
Everyone in the cryptocurrency space knows that Bitcoin has a huge “Strategy” and “Stretch” challenge that seems to be coming to a head, although we have been here three times before and the company has recovered. This time feels different – famous last words.
Strategy (MSTR, formerly MicroStrategy) is Michael Saylor’s company that hoards Bitcoin. Strategy is the elephant in the crypto room. Strategy owns just a little less than 850,000 Bitcoin, or just over 4% of the outstanding Bitcoins that have been mined since Bitcoin’s inception. That is a huge market share to be all tied up in one place. It is like playing poker with your cards face up – very dangerous on Wall Street.
“Stretch” is market’s nickname for Strategy Inc Variable Rate Series A Perpetual Stretch Preferred Stock (STRC), the funding vehicle for Strategy. STRC is a perpetual preferred that is senior to stockholders of Strategy and pays a dividend of 11.5% to its investors. Stretch is currently selling for under 90, meaning that the implied annual payment is running over 14%, and the price is nowhere near the par value of 100 that the high dividend was designed to support.
Arguably, the largest risk for anyone and everyone who trades Bitcoin is what will happen to Stretch and Strategy. Saylor’s Strategy and Stretch have been under intense pressure before, but this time seems considerably more difficult. If Saylor raises the payout for Stretch to push the value back toward par, then this would effectively shorten the time span that he could afford the payments – not a good option. If Saylor decides to sell Bitcoin from his Strategy hoard, he could trigger a much bigger sell-off. This is the classic situation of betting between a rock and a hard place. We cannot see a white knight on the horizon, but we are dealing with someone who is extremely creative and has dug out deep holes before. See our article on “Bitcoin: Calm before the Storm?”, posted in LinkedIn on June 2.
On the way down, the next technical price stop is around $50,000/Bitcoin. This is also, perhaps, a hair above the current costs of mining Bitcoin, which in the past has appeared to serve as floor. Below $50,000, the next technical resistance is down around $20,000. Whew!
Our bottom line is simple. If you buy (or continue to hold) Stretch (STRC), the payment rate is exceptionally high, serious junk bond territory, because the risks are equally high. And if one is hoping for a new class of cryptocurrency investors to come into this market, that is hard to see as well. The cryptocurrency market is quite mature now. There are futures, options, ETFs, etc. So, from where a new set of buyers might come, is not at all clear.
If you own Stretch, you effectively have written a put option on the assets of Strategy. We are not opposed to writing put options and receiving the premiums, but one might also consider a long options strangle strategy on Bitcoin which is not dependent on direction – just needs a big move up or down to turn a profit. The problem with long options tactics is that you have to get the timing right, or the theta (time decay risk) will eat one alive, yet one’s downside is capped.
Finally, since Bitcoin leads the cryptocurrency pack, up and down, switching to another cryptocurrency may not reduce the risk, even a little bit. Stretch and Strategy are both a sector challenge as well as a Bitcoin challenge.
Blu Putnam, June 22, 2026
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Disclaimer: We do not provide investment advice. We try to inform our readers about the challenges and risks involved in financial and commodity markets.
