Preface: This is the second part of a current series. Part 1 is here.

Strategy’s STRC is a high-yield, dividend-paying preferred stock that was first issued in July 2025– about a year ago. STRC was specifically created to raise capital to buy bitcoin by offering high annual income to investors. The stock is designed to maintain a stable par value of $100. Dividends are distributed to shareholders semi-monthly in cash.

Currently STRC is trading ~$75, with an effective yield that is about to go up from 11.5% to 15% on June 30– which is this Tuesday. As the STRC stock price goes down, the investor yield goes up. This fundamental capitalist feedback loop is now becoming the weakest link in the crypto house of cards.

Note this early promotional image below from Seeking Alpha of STRC. which was presented as analysis, capping the STRC dividend level at 12% over the next 16 years. As discussed above, STRC is already at 11.5%, and about to go three percentage points off their yield scale (to 15%) in less than a year. In other words, STRC is about to break through the yield projection models that were presented as legitimate crypto analysis less than a year ago.

Ever since Grayscale won their Supreme Court lawsuit against the SEC in August 2023, the nature of crypto has been flipped. Bitcoin is now publicly traded on Nasdaq, NYSE, etc, in the form of Exchange Traded Funds (ETF) that allow investors to get into bitcoin/crypto without actually buying bitcoin/crypto. The fact that bitcoin needs ETFs to attract investors who don’t really know (or care) what bitcoin is, tells you a lot about the nature of the crypto industry.

Nearly three years later, no one left in bitcoin/crypto advocates for it as decentralized finance. Bitcoin/crypto is now mostly traded in the form of stocks which are highly manipulated by the futures traders in the derivatives market. Most futures traders are shorting the market now because they no longer believe in Michael Saylor’s Strategy.

Note that STRC has no direct bitcoin backing, as it merely represents a claim on the company’s residual assets. Strategy’s only “asset” is the 846,000 useless bitcoins it holds for which it is ~$16,000/bitcoin underwater. This sinking ship, the USS Strategy, keeps trying to reshuffle deck chairs to maintain the illusion of rational business management.

How can Michael Saylor’s Strategy pay their ever-increasing dividend obligations to investors when no one wants to buy bitcoin anymore? Everything depends on the price of a useless asset (bitcoin) going up, and that’s not going to happen because the word is out.

Donald Trump, Elon Musk, etc, are widely seen as the leading crypto criminals. The Clarity crypto bill which Trump advocated for so strongly in 2024, is now dead in Congress. This crypto-sponsored legislation, along with the stablecoin bill, were designed to give a legitimate regulatory framework to crypto, in order for it to be eligible for a taxpayer bailout if the industry needs it.

The industry will definitely need a bailout to survive, the issue is the political pressure lawmakers have received over the Clarity & stablecoin bills. Traditional banking leaders have argued crypto capital requirements & consumer protections aren’t there. The fear is a crypto crash could take the entire financial system down, and they are correct.

The Fed will not be lowering interest rates anytime soon, which chokes crypto out. Bitcoin came out of the post-2008 subprime mortgage crash, as a new form of financial manipulation based on perpetual near-zero interest rates. After 2008, interest rates were kept near zero for over a decade, stimulating speculation into high risk assets such as crypto. Bitcoin mining is dependent on low energy costs and low interest rates, neither of which exist anymore.

Everyone in crypto wants to spin their narrative. No one in the industry wants to rationally look at the entire picture, gather all the facts, and come to an objective conclusion. In a macro-political sense, bitcoin is dead because Trump tariffs & his foreign wars (Venezuela. Iran, Lebanon…) have raised the cost of doing business for everyone. The crypto industry survives on cheap credit and small margins, which have been obliterated by the increased cost of living since Trump began his second presidential term.

The entire crypto market is dependent on bitcoin. Bitcoin is entirely dependent on Michael Saylor buying more bitcoin. When Strategy can’t buy any more bitcoin, and in fact has to sell bitcoin to pay its high-yield dividends to spooked investors, that’s when the big one hits. If Strategy tries to sell more STRC, the value of that stock will continue to decline, as the investor yield goes up, so that’s a downward spiral. If Strategy tries to sell bitcoin, well we saw what happened when word got out Strategy sold 32 bitcoins a month ago. Bitcoin went form $73k to $60k within a week, where it’s tenuously stayed since.

Who wants to give Michael Saylor the bailout loan he so desperately needs? He’s close to Trump, so he’s in the right circles, and that’s what’s kept him solvent up to this point, but patience is running out with big finance, and Trump has never been a partner in business that could be trusted. Trump’s own personal family fortune now rests on crypto, under his Trump Media umbrella, so he definitely has vested interest in keeping the bitcoin Ponzi scheme going. The question is now becoming, who is going to pay the bill on all the unpayable debt invested in useless crypto/bitcoin? That question has revolutionary implications which are not too far off. That is the question which bourgeois economists/politicians can’t/won’t honestly answer.

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