Bitcoin Treasury Firm Strive Says STRC, SATA Rebounded After Historic Digital Credit Selloff

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• STRC fell to as low as $82.50 before recovering to around $89.
• SATA dropped below $93 from its $100 par value before rebounding to approximately $97.
• Matt Cole described the event as a leverage liquidation rather than a deterioration in credit fundamentals.
• Strive said its dividend reserves remain intact and the company is not under financial stress.
• Strong buying interest emerged as prices fell, contributing to a sharp recovery in both securities.

Digital Credit Products Experience Historic Volatility

The digital credit market experienced one of its most significant selloffs on Thursday, prompting comments from Strive Asset Management CEO Matt Cole, who described the session as “the most difficult day in the history of Digital Credit.”

According to Cole, Strategy’s preferred equity product STRC traded as low as $82.50 during the session before recovering sharply to around $89. Strive’s SATA also declined significantly, falling from its $100 par value to below $93 before rebounding to approximately $97.

Both products are structured to trade near their $100 par value and are designed to provide investors with double-digit yields. The sharp decline temporarily pushed prices well below those levels before buyers entered the market.

Strive Asset Management has allocated $50 million to Strategy’s STRC preferred stock, highlighting growing institutional interest in Bitcoin-linked treasury strategies. The investment comes as crypto-focused firms continue expanding corporate Bitcoin adoption, while industry leaders push for legislation aimed at strengthening the long-term regulatory framework for digital assets in the United States.

According to Bitcoin Treasuries, Strive ranked among the top corporate Bitcoin treasury holders with 19,105 BTC, underscoring its growing commitment to Bitcoin as a strategic reserve asset. While Strategy continues to dominate with 846,842 BTC, companies such as Strive, Metaplanet, and MARA are expanding institutional participation in the Bitcoin treasury trend. The latest rankings highlight increasing corporate adoption as firms seek long-term exposure to the digital asset.

In a statement posted on X, Cole said the market turbulence was not caused by changes in issuer credit quality but instead stemmed from leveraged positions being unwound.

Margin Calls and Forced Selling Drove the Decline

Cole said that investors seeking to enhance returns from high-yield digital credit products increasingly used leverage. When prices began to fall, margin calls triggered forced selling, creating a feedback loop that accelerated the decline.

According to his explanation, falling prices led to additional margin requirements, which forced more investors to liquidate positions. This cycle pushed prices lower regardless of the underlying financial condition of the issuers.

He compared the episode to historical hedge fund failures involving highly leveraged positions in U.S. Treasury securities, noting that those events were often driven by excessive leverage rather than deteriorating creditworthiness.

“There is an old saying in income markets that the road to hell is paved with carry,” Cole wrote, referring to investors borrowing against income-producing assets to increase returns.

Strive Maintains Credit Fundamentals Remain Strong

Despite the volatility, Cole said Strive’s financial position remains stable. He stated that the firm’s dividend reserves remain intact and that the company continues to be well positioned to meet its obligations.

According to Cole, the underlying credit profile of the issuers involved in the digital credit market remains substantially unchanged from before the selloff.

He also pointed to the strong rebound in both STRC and SATA as evidence that investors were willing to purchase the securities at lower prices. Significant buying interest emerged after the intraday declines, helping both products recover a large portion of their losses.

Cole said the event highlights the distinction between liquidity-driven market stress and genuine credit deterioration. While acknowledging that the volatility was uncomfortable for many investors, he argued that the episode provides an early lesson for a developing asset class.

The digital credit sector remains relatively small compared with traditional fixed-income markets. Cole said experiencing leverage-driven volatility at this stage may help market participants better understand liquidity and leverage risks as the asset class continues to develop.

He concluded by reiterating that a liquidation event and a credit event are fundamentally different, maintaining his long-term conviction in the digital credit market despite Thursday’s sharp price swings.