The preferred stock STRC with a face value of 100 USD was hit below its issue price, while Bitcoin has approximately retraced by 40% since its inception. What was once revered as a "Bitcoin leverage tool," Strategy, has suddenly become the core subject of debate regarding whether the flywheel is stalling. In the past few years, the market has been happy to summarize this company with a simple story: "financing—buying Bitcoin—boosting coin prices—refinancing" through the issuance of convertible bonds, preferred stocks, and other means. Strategy's stock was regarded as an entry point to amplify Bitcoin's ups and downs, rather than a stake in a traditional software company. However, as the number of Bitcoin held exceeds 846,000, and the buying speed begins to slow down, the flywheel's momentum is weakened simultaneously by Bitcoin's pullback and the struggles of financing tools. On June 21, 2026, CryptoQuant analyst Axel Adler threw out an analysis redefining Strategy from a "Bitcoin leverage tool" to a high-risk stock with complex capital structure, pointing out four accumulating pressures: Bitcoin dips below the average cost line of the company's holdings, STRC falls below face value resulting in reduced financing ability of preferred stock, any potential selling behavior could pierce through the long-term narrative of "only buying and not selling," and the dilution backlash caused by the continuous issuance of stock. At this moment, "flywheel stalling" is no longer just a market sentiment label, but a public debate about Strategy's future path revolving around these four pressures.
From leverage tools to high-risk stocks
During the years of utmost enthusiasm for Bitcoin, Strategy (then MicroStrategy) was simply labeled by the market as a stock providing traditional accounts with leveraged Bitcoin exposure. The structure of the story appeared straightforward— the company raised dollar funds by issuing convertible bonds, purchased Bitcoin, amplified paper gains during price increases, and then used the increased share price and larger market cap to support the next round of financing. For many investors, MSTR was no longer just a software selling company, but a "Bitcoin leverage machine" listed on Nasdaq, with stock price fluctuations seen as a high-beta version of Bitcoin market movements, rather than a discounted result of operational cash flows.
However, the internal structure of this "leverage machine" did not stop at a simple layer of convertible bonds. Over time, Strategy added various financing tools such as preferred stocks beyond the initial convertible bonds, including the subsequently launched STRC for continued Bitcoin purchases, turning the capital structure from a linear model into a multi-layered nested pyramid. It was precisely at this juncture that CryptoQuant analyst Axel Adler presented a qualitative assessment that diverged from the past—he believed that Strategy was no longer simply a "leverage tool" amplifying Bitcoin fluctuations, but a high-risk stock bound together by complex debts, preferred stock arrangements, and potential equity dilution, meaning investors faced not only the bull and bear of Bitcoin price itself but also composite risks deeply tied to this capital structure.
STRC falls below face value: Alert of financing flywheel getting stuck
In the entire financing mechanism of Strategy, STRC is not an optional accessory. Designed specifically for continued Bitcoin purchases, it allows the company to leverage Bitcoin positions without immediately diluting common shareholders. For Michael Saylor, STRC bears the task of "keeping the flywheel spinning longer": when the previous round of convertible bonds had largely been used up and the market's appetite for new debt issuance became cautious, this preferred stock provided a new bargaining chip to extend the "financing—buying coins—refinancing" chain.
The problem is that this new pipeline is built on a default premise: that Bitcoin prices will continue to rise sufficiently to cover the additional leverage risks and reward willing investors. Data referenced by Odaily and Axel Adler indicate that since STRC's launch, Bitcoin prices have actually retraced about 40%, directly impacting the design logic based on rising expectations. When Bitcoin dipped below the average cost line of Strategy's overall holdings, preferred stock STRC also fell below its issuance value of 100 USD in the secondary market, leading the market to start trading this type of tool at a discount. This not only means that the cost of new issuances will inevitably rise but also serves as an intuitive signal: investors who were originally willing to buy into Saylor's "leverage buying Bitcoin" story are now demanding higher risk compensation. Therefore, Axel Adler listed "STRC financing capability decrease" as one of the current four pressures on Strategy, because in the chain where Bitcoin price and STRC price mutually drag down, once preferred stock enters the discount zone, every rotation of the flywheel requires more confidence and cost than before, meaning that even if Bitcoin itself has not reached a true life-or-death juncture, the financing flywheel supporting this high-stakes gamble has already begun to show signs of fatigue.
Four-fold pressure stacking: Bitcoin, multi-layer capital, and dilution
When the current Bitcoin price dips below the average cost line of Strategy's overall holdings, both the accounting logic and psychological narrative are pierced. On the surface, this means that what was originally a buffer on the balance sheet has eroded into losses, and any new volatility more directly affects net assets; psychologically, the image of “always standing on the winning side” that has built up over the past few years begins to falter, and the market instinctively questions: Is this still Saylor, who relies on leverage to ride momentum, or a heavy-handed gambler trapped below the average cost line, just passively waiting for the market to turn around? Axel Adler lists this as the primary pressure because once the cost line becomes the "underwater line," the company transitions from merely amplifying market bull sentiment to a high-beta danger zone amid bull pullbacks.
The second pressure arises from the tightening of the upper layers of the capital structure: The fact that STRC fell below its par value means this type of preferred stock's refinancing capacity has been weakened, forcing the originally dependent "issuing new stock, buying new coins" flywheel to decelerate. Rising financing costs make it difficult to continue amplifying Bitcoin positions without restraint; however, if the company turns to selling Bitcoin for cash, it would directly tear apart the "only buying and not selling" narrative. In Axel Adler's framework, this not only constitutes a third pressure but also poses a direct impact on the overall credibility of the story—once the market begins to believe the company will sell coins under pressure, the “extreme bullish” premium accumulated over the past few years may be repriced. The last pressure is the dilution at the common stock level, which he emphasizes: When the preferred stock space is constrained and selling coins involves narrative credibility issues, the most immediate means of raising funds is through issuing more stock, distributing risks and costs among all shareholders. This option of issuing new shares to maintain the flywheel's operation essentially trades existing shareholders' future returns for today's liquidity, and under the influence of the four aspects of Bitcoin prices, STRC financing, selling coin narratives, and equity dilution, Strategy's shareholders are forced to recalibrate the risk limits they are willing to take amid higher volatility and thinner returns.
The fracture of Saylor's narrative: Market sentiment and risk pricing
During the phase when Bitcoin was steadily climbing, the flywheel of "financing—buying Bitcoin—boosting coin prices—refinancing" was Saylor's most compelling story: tools like convertible bonds and STRC turned into cheap leverage, and each new high in Bitcoin price raised the ceiling for the next round of financing. Strategy thus transformed its identity from a software company to a massive Bitcoin exposure "holding over 846,000 Bitcoins." For many, buying this stock was simpler than leveraging directly to buy Bitcoin, thus the logic of the flywheel seemed nearly self-consistent—so long as Bitcoin trended upward in the long term, the capital market would be willing to continually pump blood into it.
Cracks appeared following Bitcoin's pullback and STRC's pressure. Odaily reported that since STRC's issuance, Bitcoin prices have retraced approximately 40%, with this preferred stock valued at 100 USD also falling below its face value, symbolically piercing the illusion that "financing costs are always controllable." In the analysis on June 21, Axel Adler redefined Strategy from a "Bitcoin leverage tool" to a high-risk stock with complex capital structures, highlighting the four pressures of Bitcoin prices falling below average holding costs, reduced STRC financing capabilities, potential selling narratives, and equity dilution. However, he also believed that these pressures had not yet evolved into systemic risks; public information shows that as of this time, there have been no forced liquidations or downgrades. Market divergence begins precisely from here: some investors demand higher risk premiums, believing MSTR should trade at a significant discount to compensate for the uncertainties posed by complex capital structures; others still view it as one of the few assets capable of providing high-beta Bitcoin exposure, interpreting the current discount as an emotional overreaction to the flywheel's temporary stalling. As Strategy slows its pace of Bitcoin purchases and increasingly relies on equity financing to maintain flexibility, Saylor's narrative transforms from a "perpetually upward flywheel" into a collective game of how risk is re-priced, and who will bear the costs of this model.
After the flywheel slows down: How much time does Strategy have left?
Under the four-fold pressure of Bitcoin prices falling below holding average cost lines, STRC financing capability being hindered, potential selling narratives impacting, and equity dilution, the extent to which Strategy can continue to amplify its Bitcoin exposure has effectively been locked in place by time and price. If Bitcoin prices strengthen again in the future, the company still has space to guide the "flywheel" back to positive by moderately issuing stocks and preferred stocks, but the cost would be the continuous dilution of existing shareholders and further complicating capital structures. MSTR transitions from a "Bitcoin leverage tool" to a high-risk equity puzzle that is hard to estimate simply; if prices hover low or continue to decline, continued buying means betting on a reversal with a higher risk premium, while choosing to sell equates to actively puncturing the core narrative of "only buying and not selling," pulling itself from a "model of faith" back to a conventional deleveraging story of a company under liquidity constraints. As of June 21, 2026, public information still shows no sign of forced liquidation or downgrades by Strategy, leaving the focal point of dispute on how long the market can tolerate the model and how risk should be repriced, rather than a disaster that has already erupted; for investors, it is more crucial to distinguish between the high leverage risks at the company level and the overall industry risk, focusing on paths of Bitcoin prices, the repricing of STRC and MSTR in the capital markets, and whether the company will break "only buying and not selling" narratives, keeping these key signals in mind as they face high-beta stakes driven by complex capital structures and narratives, and contemplating clearly whom they are willing to incur costs for in this story.
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