A stablecoin promises to hold a fixed value of $1, but STRC has never made this promise. These are preferred stocks, a class of stock that pays a fixed dividend, designed to trade at nearly $100 but with no anchor to defend, so they can’t “unravel” like UST did.
“The goal of the strategy has been to support STRC trading near $100, not to underwrite it,” Palmer said. “In our view, what happened with STRC cannot be described as a deindexation – something that has never been indexed cannot be deindexed – but as a reset of the return required by the market.”
UST was algorithmic, maintaining its dollar value through a creation and burning loop with a sister token, LUNA, and no hard reserve behind it. When the trust was broken, the loop unfolded and both fell to almost zero.
The STRC does not have such a self-reinforcing mechanism. It is indirectly backed by Strategy’s bitcoin, which the company says now totals 847,363 coins worth about $54.5 billion.
The drop, however, affects Strategy’s purchasing engine. When STRC trades at $100 or more, the company issues new shares and uses the cash to buy more bitcoins.
Below this level, the channel stops working, which is why Strategy paused it.
