Institutional investors are increasingly viewing Strategy’s STRC Preferred Stock as a mainstream income product rather than a specialized cryptocurrency-related investment.
With a total investment of $756 million, STRC has amassed the largest holdings of the three major U.S. preferred stock exchange traded funds (ETFs): BlackRock’s PFF, Virtus InfraCap’s PFFA, and VanEck’s PFXF.
Why is this a bullish sign?
This is worth noting because these ETFs are often looking for stable income.
Therefore, ETF managers have allocated significant portions of their portfolios to STRC, exposing millions of investors to the strategy’s credit products.
This shows that despite Strategy’s close ties to Bitcoin (BTC), the market is starting to view the company as a reliable issuer of bonds.
Concerns and criticism remain
Interestingly, this is despite the fact that at the time of publication, STRC was trading below $100 at $86.88. Furthermore, Von Reh, the current CEO of Strategy, further highlighted the issue, saying that on the retail side, there was a decline in numbers.
As expected, eternal Bitcoin critic Peter Schiff used this opportunity to attack Strategy, saying:
Yes, but that means the retail investor sold at a loss. My guess is that institutional buyers bought in for short-term trading purposes only. Or maybe you sold MSTR short and bought STRC as a spread trade. Perhaps they bought STRC and shorted Bitcoin. None of these trades are bullish bets.
Is the broader market helping STRC?
While all this was going on, Bitcoin, which was trading near $65,000, has fallen 2.28% over the past day, returning to $63,934.94 at the time of writing.
This occurred around the same time that Strategy decided to increase its US dollar holdings by an additional $225 million, bringing its total cash reserves to $3.2 billion. However, rather than being a bullish sign, this caused concern in the market.
This is because as long as STRC remains below the critical $100 level, AMBCrypto’s recent analysis confirms that Strategy’s ability to raise new funds through its ATM program to purchase more Bitcoin remains limited.
Final summary
- Strategy’s preferred stock is gaining momentum, with major institutional investors investing $756 million in STRC.
- But Peter Schiff attacked Strategy’s STRC as retail participation dwindled.
