Bitcoin’s corporate credit market – now worth more than $10 billion – has passed its first real stress test. A June selloff that sliced Bitcoin below $60,000 triggered forced liquidations in preferred shares issued by Strategy and Strive, sending some of the most popular instruments 25% below their stated value. Yet the market held together. Dividends kept flowing. Secondary trading volumes hit records. And new issuers in the US, Europe, and Asia are still pushing forward with plans for similar yield-bearing products.
The episode, detailed in a new report from BitcoinTreasuries.net, marks the first time this niche corner of crypto finance faced a serious unwind. It showed how fast a seemingly stable trade can crack when too much leverage is piled on. But it also showed that the structure – preferred shares that pay fixed or variable dividends and have no maturity – can absorb a shock without shutting down.
How leverage turned a calm trade into a cascade
For months, Strategy’s STRC and Strive’s SATA traded within a tight range near their $100 par value. That stability lured in investors who borrowed money to buy more shares, pocketing the dividend yield minus the cost of their loans. As long as the shares hovered near par, the math worked.
Then Bitcoin dropped. On June 18, STRC and SATA both fell sharply below par. Margin calls hit leveraged holders of STRC, forcing them to sell into a weakening market. That selling pressure pushed the shares even lower, triggering more liquidations. STRC bottomed near $75. SATA slid to around $88.
Strategy holds over 800,000 BTC, making it the largest corporate Bitcoin holder by a wide margin. Its STRC preferreds allow the company to raise long-term capital without diluting common equity or issuing conventional debt. Strategy can adjust the dividend to support the share price. Strive’s SATA pays a variable daily dividend. Neither instrument has a maturity date.
The selloff exposed the risk embedded in these structures: when leverage is widespread, a price drop can feed on itself. But the market did not seize. Dividend payments continued. The secondary market absorbed the volume. The buyers who held without leverage simply watched their income stream wobble.
What comes next
The report calls the June event a “meaningful stress test” and concludes that the sector emerged bruised but operational. That verdict has encouraged a pipeline of new issuers. Prospective companies in the US, Europe, and Asia are actively working on preferred-share offerings tied to Bitcoin holdings, betting that the market can grow beyond Strategy and Strive.
For investors, the key watch item is whether Bitcoin can stabilize above the levels that triggered the last cascade. If prices hold, the leveraged positions that remain will have time to de-risk. If Bitcoin drops again, the same mechanism could reassert itself. The next verifiable update to watch: any new prospectus filings from the reported pipeline of issuers, which would confirm that the appetite for corporate Bitcoin credit products is still expanding.
Bitcoin credit market weathers first major crash, new issuers continue despite losses
In June, a drop in Bitcoin’s price caused forced selling of preferred shares from Strategy and Strive, lowering their value by 25% and affecting investors who borrowed to buy these shares. Despite this, dividends kept paying and trading remained strong, encouraging new companies in multiple regions to offer similar Bitcoin-based income products.