STRC update - end of Jan 25

January 2026 will go down as the month the "Bitcoin Standard" corporate model faced its greatest stress test—and passed with flying colors. Strategy Inc. (formerly MicroStrategy) has not only rebranded but has fundamentally rewritten the playbook for corporate treasury management. Below is our update on the four critical themes defining the end of the month.

1. STRC: The Most Successful Preferred Stock in History

We can now state definitively that the Variable Rate Series A Perpetual Stretch Preferred Stock (STRC) is by far the most successful preferred stock in the history of capital markets.

While General Motors may hold the record for the largest nominal issuance from its 2010 restructuring, STRC has achieved something far more difficult: liquidity and stability at sovereign scale. Strategy Inc. proved this month that they can maintain a par value of USD100 per share with minimal volatility, even while the underlying asset (Bitcoin) and common stock (MSTR) fluctuate wildly.

  • Least Volatility: While the common stock (MSTR) experiences volatility exceeding 60-70%, STRC has traded with a historical volatility of just 7%, consistently hugging the USD100 peg. This validates the "Stretch" mechanism—the board's ability to adjust the dividend rate (currently ~11%) to defend the price floor.
  • Sovereign Scale Issuance: Strategy Inc. has demonstrated the ability to manage a digital credit issuance that rivals nation-states. With a notional value of USD3.37 billion and authorized capacity to reach nearly USD7 billion, STRC is no longer just a niche instrument; it is a massive liquidity pump,. The stock generates approximately USD98.7 million in daily volume, exceeding the liquidity of the world's largest Preferred Stock ETF (PFF) and trading 200 times the volume of comparable bank preferreds.

This month proved that STRC is not just a funding vehicle; it is a "corporate stablecoin" that pays a yield, effectively solving the duration risk that has plagued preferred investors for a century.

2. Calling the Bluff: Strategy Inc. vs. MSCI

Despite the much-publicized "bluff" from MSCI regarding index exclusion, Strategy Inc. has continued MSTR common stock dilution at an accelerated pace. The message is loud and clear: Strategy Inc. wants to see MSCI act on their decision.

Following MSCI’s threat to exclude "Digital Asset Treasury" companies, Strategy Inc. did not slow down. Instead, they executed a massive capital raise of USD2.13 billion in a single week (Jan 12–19), utilizing their At-The-Market (ATM) program to flood the market with approximately 10.4 million new shares of common stock,.

By deploying this capital immediately to acquire 22,305 Bitcoin, Strategy Inc. signaled that its "Flywheel" is not dependent on passive index flows. They have effectively dared the gatekeepers to enforce the cap, betting that active market demand—driven by traders and arbitrageurs—is deep enough to absorb billions in supply without MSCI’s help. The company is operating on a Bitcoin standard, and they have proven they will not dilute their strategy to appease traditional finance guardrails.

3. The Gatekeepers' Opaqueness: Where is the Cap?

Despite our sincere search and a rigorous audit of the available data, we could not find at what numbers MSCI has capped MSTR. This lack of transparency reveals the standard operating procedure of financial gatekeepers.

The timeline of events exposes a chaotic process:

  1. The Spook: MSCI spooked the market with an unnecessary consultation request, threatening full exclusion of companies with >50% digital assets.
  2. The Claw Back: Realizing that excluding one of the market's highest-volume stocks would hurt the index's representativeness, they clawed back their proposal.
  3. The "Hatched on the Fly" Plan: They replaced exclusion with a vague "penalty box" regime—keeping Strategy Inc. in the index but capping its weighting (Number of Shares),.

Critically, MSCI has not publicly shared the hard numbers or the exact threshold for this cap. This suggests a policy hatched on the fly, lacking concrete details, designed to save face while attempting to constrain a corporate strategy they do not fully understand. Strategy Inc.’s response—ignoring the ambiguity and printing billions in stock anyway—exposes the gatekeepers' lack of actual leverage.

4. Recommendation on Investment Strategy

Given the current landscape, investors are presented with two distinct paths.

For the Long-Term Holder (MSTR): Given the cloud of uncertainty surrounding the indexation constraints, MSTR will likely continue its traditional high volatility. However, the stock is currently operating at a compressed valuation relative to its potential. With the company successfully raising active capital independent of index funds, and given that the stock appears to be operating at a low premium over its asset base due to the recent regulatory fears, it appears to be a good buy for the long-term holder willing to stomach the variance for maximum Bitcoin exposure,.

Our Top Pick (STRC): Though we see value in MSTR, we always recommend buying STRC for obvious reasons.

  • Fixed Visible Return: It currently offers a massive, variable annualized yield (approx. 11%) paid monthly,.
  • Least Volatility: It offers a "volatility strip," isolating the yield while protecting principal at the USD100 par value,.

For investors seeking to benefit from the Bitcoin standard without the rollercoaster risk of the common equity, STRC remains the superior instrument.