Strategy announced a strategic shift, as it will begin focusing on issuing Bitcoin-backed loans. The product, called Stretch (STRC), is designed to offer investors Bitcoin returns while reducing outright volatility.
The new offering, called Stretch (STRC), introduces perpetual preferred stock with a monthly reset dividend of 11.25% and a target par value of $100. According to Strategy, the intention is to stabilize the price around this value and, once achieved, allow the company to resume issuing shares on the market. Essentially, the design seeks to combine attractive yield with capital structure discipline.
From a product perspective, Stretch is intended as an income-oriented way to gain exposure to Bitcoin, but with less volatility than outright ownership of the asset. CEO Phong Le explained that the company sought to create an alternative for those who want access to digital capital without being fully exposed to its sharp price swings. Thus, the instrument offers a periodic cash flow, while the backing comes from the Bitcoin held on the balance sheet.
Key features and objectives of Strategy’s new product
This launch also marks a significant shift in Strategy’s funding strategy, as after heavily relying on convertible debt, the company decided to move towards perpetual preferred stock. CFO Andrew Kang described this shift as creating a “forever instrument versus a forever asset,” expanding access beyond the typical institutional convertible bond market and reducing dilution risks for common shareholders.
To support the proposal, the company highlighted key figures: a $2.25 billion reserve and approximately 5.6 times collateral coverage, which would allow it to cover two to three years of dividends even in stress scenarios. This data aims to bolster the confidence of yield-priority investors who might prefer a Bitcoin-backed loan structure to buying BTC directly.
In parallel, the firm emphasized its work with regulatory bodies. Executives noted active engagement with the FASB, the IRS, and the SEC, particularly regarding the accounting and tax treatment of digital assets. The shift toward recognizing Bitcoin at fair value on the balance sheet is part of this evolution, with the argument that it better reflects economic reality than previous models focused solely on impairment.
In short, Stretch opens a new structured path to Bitcoin exposure, combining fixed returns with explicit backing in reserves and collateral. The real test will be whether the company can maintain market confidence in its dividend model and whether secondary liquidity and institutional adoption scale sufficiently to solidify what it describes as an emerging Bitcoin-based credit curve.
