Bitcoin’s ‘digital credit’ yield trade breaks below par as margin calls hit $10 billion market
Bitcoin-linked “digital credit” products STRC and SATA briefly broke below par this week, exposing leverage risk in a market now near $10 billion. Both are perpetual preferred shares from Bitcoin treasury companies, marketed as income securities with roughly 11%–13% dividends and an expected pull toward $100. STRC fell to about $82.50 and SATA slipped into the low $90s before rebounding. The drop appeared driven by margin liquidation rather than issuer stress. Investors had borrowed against the shares, assuming they would stay near par; once prices fell, margin calls likely triggered forced selling, which may have been amplified by short sellers and overlapping investor bases. Issuers said dividend reserves and balance sheets remained intact. The selloff showed that these products can pay dividends yet still swing sharply when leverage builds. It is likely to prompt tighter broker margin rules and push issuers to consider stronger cash reserves, buyback support, or other safeguards.
