- Michael Saylor announced a new preferred share offering called Stretch (STRC), marking the company’s fourth series with perpetual yields.
- Saylor stated the new offering aims to create a yield curve for Bitcoin (BTC) credit, comparing it to major bond markets.
- MicroStrategy holds over 3% of BTC’s supply and claims its securities can benchmark rates against instruments like U.S. Treasuries and mortgage-backed securities.
- Experts note the proposed “BTC credit yield curve” uses yields from different instruments, not actual BTC credit or bond yields.
- The new STRC preferred shares are senior to some MicroStrategy securities, but junior to certain other company debts.
On Monday, Michael Saylor introduced the initial public offering of Stretch (STRC), the fourth series of preferred shares from his company. These shares promise perpetual yield and are being presented as part of a new approach to bitcoin-based credit instruments.
Saylor stated that by launching STRC, he is “building out the yield curve for BTC credit.” MicroStrategy, which he leads, is notable for holding more than 3% of circulating bitcoin supply and is the world’s largest publicly traded bitcoin treasury company. According to Saylor, this position allows MicroStrategy to offer yield-bearing securities benchmarked against large bond markets, including U.S. Treasuries and mortgage-backed securities.
A diagram published by Saylor’s team during the STRC launch compared the proposed BTC credit yield to yield curves of traditional bond instruments. The diagram showed that the returns available from MicroStrategy’s preferred shares, like Strife (STRF), are currently priced at a 3.4% premium above the 20-year U.S. Treasury bond. “For just an extra 3.4% yield, investors are allegedly willing to forego the full faith and credit of the U.S. government for one of MicroStrategy’s preferreds,” according to the announcement. Saylor explained that MicroStrategy’s BTC credit yield curve appears slightly inverted, meaning long-term yields are lower than some short-term rates, which reflects current market conditions for junk bonds and leveraged loans.
Some analysts highlight that the MicroStrategy yield curve uses dividend yields from different types of securities instead of actual bond yields. Typically, a credit yield curve shows the relationship between interest rates and time to maturity for the same credit quality. MicroStrategy’s curve instead combines yields from various instruments and excludes its own bond yields. Additionally, the proposed BTC curve is based on dividend rates from preferred shares, which are considered less secure compared to bonds.
The article points out that bitcoin itself does not generate yield or offer credit. It is an asset recorded on a blockchain, and the reference to a BTC credit yield curve does not align with traditional definitions of financial yield curves. On MicroStrategy’s capital stack, STRC shares are senior to some securities but remain junior to certain debts, such as convertible notes and the Strife series of preferred shares.
For further details, Saylor’s investor presentation can be viewed here. Information on MicroStrategy’s debt series is available here. The company’s approach has drawn attention on social media, with some commentators describing the strategy as “a bitcoin yield curve in disguise.”
Despite the comparisons, the article concludes that BTC does not have its own credit yield curve, and any analogies remain aspirational.
✅ Follow BITNEWSBOT on Telegram, Facebook, LinkedIn, X.com, and Google News for instant updates.
Previous Articles:
- London Gang Jailed After Botched Kidnapping Over Fake Crypto Fortune
- Greedy Sponge Group Deploys Modified AllaKore RAT in Mexico
- StablecoinX Raises $360M to Buy ENA Tokens, Eyes Nasdaq Listing
- Citadel Urges SEC Caution on Tokenized Equities, Opposes Exemptions
- Africa’s Crypto Adoption Surges as Decentralized AI Gains Ground
