As seen on The Truth About Your Future with Ric Edelman July 31, 2026
By Mary Kolesar, Investment Analyst and Christopher F. Poch, Founder & CEO | Promethium Advisors
How can an investor participate in the long-term, potential growth of bitcoin, while limiting the inherent volatility?
Michael Saylor and his company Strategy propose one solution: A Variable Rate Series A Perpetual Stretch Preferred Stock, commonly referred to as “stretch” (“STRC”).
STRC is a cumulative preferred stock that currently offers double-digit annual dividends, paid twice a month (1). To investors desiring high current income, that may be an attractive deal.
How does it work? STRC acts not quite like a bond and not quite like a stock. STRC doesn’t offer a promise to repay the principal at maturity, and it doesn’t offer a claim on the company’s capital growth either (2). STRC offers perpetual semi-monthly dividends, regardless of the current price, for as long as the company has the ability to pay them.
Strategy issues shares of STRC at a par of $100. The company’s ability to adjust the monthly dividend up or down is designed to keep the price around that target of $100. If the market price of STRC rises above $100, Strategy may slowly reduce the dividend. If the price of STRC drops below $100, the company may increase the dividend, and it has done so several times since its first issue in July of 2025 (3). Initially, the dividend rate sat at 9.00%. In the last twelve months, that value has been repeatedly raised in increments of 25-50 basis points, bringing the current dividend rate to $.50 every two weeks or $12.00 annually (4). Strategy can raise dividends by any amount at any time if formally approved and declared by the company’s board of directors prior to the first day of the adjusted period (5). However, STRC’s terms restrict reductions in the dividend to no more than 25 basis points (one quarter of one percent) per month (plus an adjustment tied to SOFR as an interest rate benchmark) (6). If the board of directors ever fails to declared a dividend for a given period, those payments will accrue and must be paid if and when dividends resume (7).
Strategy defines three intended uses of proceeds from the sale of these securities: 1) to cover operating costs, 2) to accumulate bitcoin, and 3) to pay cash dividends (8). Essentially, the company’s assumption is that the value of bitcoin will continue to outpace the cost of the interest and dividend owed from the issuance of these types of securities. If they’re right, Strategy pays out part of the return on its bitcoin investment as a dividend to holders of STRC. Strategy retains the returns above the dividend rate if bitcoin prices surge, while STRC investors receive the current income with some potential downside protection when bitcoin prices vacillate.
Source:
https://www.nasdaq.com/market-activity/stocks/strc/historical
https://www.strategy.com/strc/dividends
However, bitcoin itself doesn’t pay dividends, so where is Strategy getting the money to pay its investors? In the past, when market participants expected the average annual return of bitcoin to be significantly higher than 12 percent, Strategy was able to issue new shares of STRC. As new shares of STRC were issued, the proceeds went to paying dividends and to buying additional bitcoin. In times when the outlook for the price of bitcoin dimmed, the cost to issue new shares of STRC increased, and the dividends were paid by selling Strategy’s bitcoin holdings (9). If there ever comes a time when dividends are not paid, the owed amount will accrue, and STRC investors would be repaid when dividends resume.
The Strategy model of selling more of its common stock or issuing STRC preferred shares means that the company’s dividend offer can withstand many years of lower bitcoin prices. At the current bitcoin price levels, Strategy can pay STRC dividends for approximately 30 years. To be clear, there is a chance that an investor in STRC could lose all of their money. Those who believe in the Bitcoin blockchain, such as Michael Saylor, founder and CEO of Strategy, feel that this is unlikely.
In an interview with Fox Business in November 2025, Saylor expressed that “[a]s long as bitcoin goes up 1.25 percent per year, the company can pay the dividend forever and create more shareholder value” (10). In the case where bitcoin goes flat forever, Strategy has “got about 80 years to figure out what we’re going to do about that” before cash to pay dividends runs out (11). Note that bitcoin was trading near $92,000 on the day of the interview, and has since dropped to around $65,000 in late July 2026 (12). Further still, in the case where the value of bitcoin takes a turn for the worse, Saylor feels confident that this model is “engineered to take an 80 to 90 percent drawdown and keep on ticking, so I think we’re pretty indestructible” (13).
Strategy’s website display a dashboard complete with metrics and a live-updating count of how long the company can continue to cover dividends for its shareholders (14). As of July 23, 2026, Strategy had enough in cash reserves to cover 22 months of dividends, and enough bitcoin in reserve to cover payments for 31.2 years (15). Investors need to decide for themselves if 31 years of coverage in bitcoin at current prices are “indestructible.”
Assuming the dividend rate continues at its current rate of $12.00 per year, if at the end of the period there was no principal left to repay, an investor could earn an average return of 10.72 percent. Said differently, assuming no changes from today, a $100 investment in STRC could recoup the original investment in around 9.3 years. If an investor purchases the security at its current price of $86 and receives the same dividends, that timeline is shortened to just over 8 years. (7 years? 12×7=84)
| Holding Period | Dividends Received |
|---|---|
| 1 year | $10.72 |
| 5 years | $53.60 |
| 10 years | $107.20 |
| 20 years | $214.40 |
| 30 years | $321.60 |
Critics might argue that there is possibility that Strategy could suspend the dividends tomorrow and never repay a dime: dividends are only paid “when, as and if declared” by the company’s board of directors and could therefore be withheld, even if the company has the funds to pay (16). That is true, though the current market price of STRC, around $86, suggests most investors feel that scenario is very unlikely. In addition, it is important to flag that although Saylor seems to be promising stable income with STRC, the price of the stock itself can still be volatile (for example, with the swing from $96 down to $74 in June of 2026) (17).
STRC’s ability to pay dividends relies on bitcoin continuing to increase in value over the long term. As with all investments, that growth can never be guaranteed. Still, Michael Saylor is clearly betting that bitcoin will outperform the dividends he has described. For the investor who agrees with Saylor about bitcoin’s long-term future, STRC may represent one way to participate in the promise of bitcoin and earn high current income while potentially experiencing less volatility than bitcoin itself.
Disclosures
Investment advisory services are offered through Promethium Advisors, LLC, a Registered Investment Adviser with the U.S. Securities and Exchange Commission. This material is intended for informational purposes only. It should not be construed as legal or tax advice and is not intended to replace the advice of a qualified attorney or tax advisor. Clients should consult their tax advisor for matters involving taxation and tax planning and their attorney for matters involving trust and estate planning and other legal matters. The materials and calculations were compiled from company reports, public filings, and other sources considered to be reliable. While believed to be reliable, no representations of their accuracy can be made, and we cannot guarantee their accuracy or completeness. The views expressed herein are those of the author. All opinions are subject to change without notice. Neither the information provided, nor any opinion expressed constitutes a solicitation for the purchase or sale of any security or constitutes an investment recommendation. Past performance is no guarantee of future results.
These materials do not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives of the persons who receive it. The strategies and/or investments discussed in this material may not be suitable for all investors. Investors should independently evaluate particular investments and strategies and encourage investors to seek the advice of a Financial Advisor. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives.
Sources
Image Credit: magnific.com
- https://www.strategy.com/strc/learn ↩︎
- https://www.youtube.com/watch?v=dIsaowYbnP8 ↩︎
- https://www.strategy.com/strc/learn ↩︎
- https://www.strategy.com/strc/dividends ↩︎
- https://assets.contentstack.io/v3/assets/bltf8d808d9b8cebd37/bltf92fffe531ee4e91/687e5999b9a7491525dd3963/strc-investor-presentation.pdf ↩︎
- https://www.sec.gov/Archives/edgar/data/1050446/000119312525161908/d852456d424b5.htm, S-10 ↩︎
- https://www.sec.gov/Archives/edgar/data/1050446/000119312525161908/d852456d424b5.htm, S-9 ↩︎
- https://assets.contentstack.io/v3/assets/bltf8d808d9b8cebd37/blt3a71735d6488d2d8/69c0a9d02837335e3b55ebbb/form-424B2_offerings-page_03-23-2026_strategy-base-prospectus.pdf, S-12 ↩︎
- https://www.youtube.com/watch?v=dIsaowYbnP8 ↩︎
- https://www.foxbusiness.com/video/6385270391112 ↩︎
- https://www.foxbusiness.com/video/6385270391112 ↩︎
- https://www.nasdaq.com/market-activity/cryptocurrency/btc/historical ↩︎
- https://www.foxbusiness.com/video/6385270391112 ↩︎
- https://www.strategy.com/strc ↩︎
- https://www.strategy.com/ ↩︎
- https://www.sec.gov/Archives/edgar/data/1050446/000119312525161908/d852456d424b5.htm ↩︎
- https://www.nasdaq.com/market-activity/stocks/strc/historical ↩︎
