The sell-off in crypto-linked preferred stocks has broadened beyond Strategy's STRC, with shares of BitMine Immersion Technologies' BMNP and Strive's SATA also hitting new lows this month. The weakness reflects deepening investor concern over dividend coverage as Bitcoin and Ethereum prices continue to slide.
Preferred Stocks Under Pressure
STRC, the Variable Rate Series A Perpetual Preferred Stock issued by Michael Saylor's Strategy, has fallen from its $100 par value to a record low of $72.60. The decline has spread to peers: BMNP dropped to $81.40 from a monthly high of $92, while SATA slid to $83.53. Other Strategy-issued preferreds—STRK, STRD, and STRF—have also weakened significantly.
The broad-based slump suggests the market is repricing risk across the entire crypto-preferred sector, not just isolated to one issuer. Investors are increasingly focused on the ability of these companies to maintain dividend payments amid falling asset values.
Crypto Market Weakness Drives Cash Concerns
Bitcoin has fallen to $58,000 from its all-time high of $126,300, while Ethereum has dropped to roughly $1,500 from nearly $5,000. The prolonged downturn has pushed the market net asset value (mNAV) of many crypto-focused companies below 1, raising fears that they may need to raise cash to cover dividends or pause their accumulation strategies.
Strategy recently raised $300 million through a share sale, diluting existing shareholders. The company now holds $1.4 billion in cash, but analysts estimate that may not cover dividend obligations for a full year. Strive has stated it has a two-year dividend coverage buffer, while BitMine reports $601 million in cash and marketable securities with no debt.
Policy Shift Adds to Uncertainty
A key red flag emerged when Strategy altered its long-standing policy of never selling its Bitcoin holdings. The company made its first sale in recent weeks, and further sales could follow. Given that Strategy's average Bitcoin purchase price is around $68,000, any additional sales at current levels would lock in losses.
BitMine, which evolved from a Bitcoin mining firm into an Ethereum accumulator, has seen its common stock fall to $13 from a 2025 peak of $160. The company's preferred stock decline mirrors that broader weakness.
Outlook Hinges on Crypto Recovery
Optimists like Tom Lee, Michael Saylor, and Vivek Ramaswamy hope the crypto downturn will reverse soon, which would boost asset values and restore confidence in these preferreds. However, the crypto market faces stiff competition from equities, which remain in a prolonged bull run. Many investors have rotated out of crypto ETFs into stocks, and a meaningful crypto recovery may require a pullback in the stock market.
For now, the sector remains under pressure, and dividend sustainability will be a key focus for investors in the weeks ahead.
This article is for informational purposes only and does not constitute financial advice.
