What Is STRC? Strategy’s Dividend-Paying Bitcoin Preferred Stock Explained

Why a Stock That Pays Twice a Month Turned Heads

Most dividend stocks pay investors four times a year. A growing group of crypto-linked companies pay monthly. In June 2026 Strategy, Inc. went a step further: it won shareholder approval to pay holders of one of its securities in cash twice every month, starting in July. That security is STRC, and it sits at the center of an unusual strategy that pairs a double-digit yield with exposure to Bitcoin.

This guide explains what STRC is, how it works, and what to watch out for. It is educational only and not investment advice.

STRC at a Glance

STRC is the Nasdaq ticker for Strategy’s Variable Rate Series A Perpetual “Stretch” Preferred Stock. One distinction matters first: STRC is preferred stock, a separate security from Strategy’s common stock, which trades under the ticker MSTR. Buying STRC is not the same as owning common shares in Strategy, nor the same as holding Bitcoin directly.

As a preferred share, STRC carries a fixed set of terms. It is perpetual, with no maturity date, so Strategy is never required to buy it back. It carries a stated value of $100 per share, which also sets a liquidation preference, the amount holders rank to receive ahead of common shareholders in a wind-down, that never falls below $100. Its legal par value, by contrast, is only $0.001 per share, a purely nominal figure. It is cumulative, so skipped dividends accrue rather than disappear, and non-convertible, so it cannot be swapped for common stock. It is also callable: Strategy can redeem the shares at $101 each, plus any unpaid dividends, whenever it chooses. Importantly, STRC is not secured by any specific Bitcoin, so holders have no direct claim on the coins in the treasury.

About Strategy, Inc.

Strategy began life in 1989 as the enterprise software firm MicroStrategy and rebranded to “Strategy” in early 2025 to reflect its new identity as a Bitcoin-first business, while keeping the MSTR ticker. Michael Saylor, who pioneered the corporate Bitcoin treasury playbook, serves as executive chairman, with Phong Le as president and CEO. It is the world’s first and largest Bitcoin treasury company.

By mid-2026 Strategy held roughly 847,000 BTC, around 4% of all the Bitcoin that will ever exist, accumulated through repeated capital raises. Unlike some treasury peers, Strategy does carry debt in the form of senior convertible notes, which rank ahead of its preferred shares. Its preferred stock programs, STRC among them, are a key engine funding its ongoing Bitcoin buying.

How Does STRC Work?

STRC raises capital that Strategy puts toward buying more Bitcoin, and in return it pays shareholders a high, actively managed dividend. Four mechanics make it tick.

The dividend rate and its guardrails

The rate is variable and set at Strategy’s discretion. There is no ceiling on increases, but cuts are limited: in any month Strategy cannot trim it by more than roughly a quarter point plus a market-rate adjustment, and it can never fall below one-month SOFR, a short-term benchmark rate. It launched at 9% in July 2025, climbed through seven increases, and reached 11.5% by spring 2026, where it has held through mid-2026.

Cash twice a month

STRC paid monthly until July 2026. After shareholders approved the change at the June 8, 2026 annual meeting, Strategy switched it to two cash payments a month, on the 15th and the final day, with the first semi-monthly payment landing on July 15, 2026. The rate itself does not change: the annual total stays the same, split into smaller, more frequent installments. Strategy’s CEO framed the move as a way to stabilize the price, smooth out cyclicality, deepen liquidity, and let holders reinvest sooner.

Keeping the price near $100

Strategy openly designs STRC to trade in a narrow band around its $100 stated value, roughly $99 to $101. To defend it, Strategy can raise the dividend or pause issuance when the price slips below par, and trim the dividend when it climbs above. This is an intention, not a promise: STRC traded below par for much of mid-2026, slipping near $97 around the time the twice-monthly switch was announced and then sliding to record lows below $80 in late June, roughly 20% under par, as Bitcoin sold off sharply.

Where the proceeds go

Money raised from selling STRC shares goes toward buying Bitcoin and general corporate purposes. The July 2025 listing alone raised about $2.5 billion. The dividends themselves lean heavily on fresh capital from continued share sales rather than software-business profits, which is central to both the appeal and the risk.

Where STRC Sits in Strategy’s Preferred Stack

STRC is one of four preferred shares Strategy has issued, each with a $100 stated value but different terms. STRF, nicknamed “Strife,” pays a fixed 10% and ranks most senior. STRC, the “Stretch,” sits next, the only one with a variable rate and the only one paying monthly, now twice-monthly. STRK, the “Strike,” pays a fixed 8% and can convert into common stock. STRD, the “Stride,” pays a fixed 10%, is non-cumulative, and ranks most junior. In a wind-down, all of them rank behind Strategy’s debt but ahead of MSTR common stock. STRC’s higher headline rate reflects its place below STRF in that order.

How STRC’s Dividends Are Taxed

For US investors, STRC’s payouts have so far counted as a return of capital, not ordinary dividend income. Because Strategy has no accumulated earnings and profits to distribute, each payment first reduces your cost basis, tax-free, until it reaches zero; after that, payments become capital gains.

This defers tax rather than erasing it, and the classification is decided year by year based on Strategy’s tax position. It is an expectation, not a guarantee, and the treatment depends on each holder’s situation, so confirm it with a licensed tax professional.

The Appeal for Income Investors

• A double-digit target yield, 11.5% per year as of mid-2026, paid in cash twice a month from July 2026.
• Indirect Bitcoin exposure without buying and storing cryptocurrencies yourself.
• Designed to trade around its $100 stated value, a design goal rather than a guarantee, and typically far less volatile than Strategy’s MSTR common stock.
• Cumulative, so any skipped dividend accrues and must be paid before junior shares.
• Ranks ahead of MSTR common stock if the company is ever wound down.
• Return-of-capital treatment can defer US tax for many holders.

Risks to Weigh First

• Dividends are declared at the board’s discretion and are never guaranteed.
• The price can fall well below par: STRC sank to record lows below $80 in late June 2026, around 20% under its $100 value, as Bitcoin dropped sharply.
• The shares are not secured by any Bitcoin, and the dividend leans on continually raising new capital rather than operating profit.
• Strategy’s finances are tied to Bitcoin, and it reported large unrealized losses when Bitcoin’s price fell in early 2026.
• The dividend rate is variable and can be cut within set limits.
• Strategy can redeem the shares at $101 whenever it chooses, which caps your upside, and STRC ranks junior to the company’s debt.

STRC vs Bonds, Preferred Stock, and SATA

STRC borrows the shape of a traditional preferred share but behaves differently in several ways. The table below sets it against a standard preferred, a high-yield bond, and Strive’s SATA, the security that was modeled on STRC.

The headline difference from a bond is the source of the yield. A bond coupon is a contractual debt the issuer must pay or default. STRC’s dividend is paid only when declared, and as equity it ranks behind any debt Strategy holds. STRC also came first in this niche: Strive’s SATA preferred stock was modeled closely on it, copying the $100 anchor, the variable rate, and the Bitcoin-treasury flywheel, then pushing payments all the way to daily.

Why STRC Matters in 2026

Bitcoin-backed preferred stock is a young idea, and Strategy is its pioneer. STRC’s twice-monthly switch, arriving just as Strive moved its rival SATA to daily payouts, signals a clear competitive trend: issuers are paying ever more frequently to keep these securities pinned near their $100 value and to court income-focused investors who want to sit closer to Bitcoin without owning it outright.

It is also speculative. There is no operating business funding the 11.5% yield beyond the Bitcoin treasury and ongoing capital raises, and the model depends on continuously issuing new shares. Whether an instrument like this fits a portfolio depends heavily on how you view crypto as a long-term holding. The terms have shifted repeatedly since launch: the rate, the price band, and now the payment schedule have all changed in under a year.

Important: This article is for general informational and educational purposes only. It is not investment, financial, tax, or legal advice, and nothing here is a recommendation to buy or sell any security. Details such as the dividend rate, Bitcoin holdings, and trading price change frequently. Always confirm the latest terms on Strategy’s official STRC page before making any decision, and consider speaking with a licensed financial advisor.