Billions of Dollars backed by STRC.

Here are the market winning products built on STRC and Digital Credit…

All Preferred Equities:

Interest Rate Resistant Basket

• Theoretically, STRC will be correlated with the SOFR rate. Therefore, if SOFR decreases, so does STRC’s yield. There exists an optimal basket of Strategy preferred equities with varying duration to protect investors from interest rate volatility.

STRK Levered Upside Kicker

• The bond portion of STRK provides a floor to its price. Now, recognize that it spits out 10% annually at current prices. There exists an optimal way to reinvest the STRK dividends into levered Bitcoin, Bitcoin call options, or MSTR call options, to participate in additional Bitcoin upside. You have a price floor, while using the income to participate in most of Bitcoin’s upside.

STRK Delta Hedge

• The convertible arb desks have been running this strategy since the beginning. As MSTR’s price increases towards the conversion price of $1,000, there will be massive delta hedging against STRK. This provides additional volatility-dependent income in addition to STRK’s yield.

SATA vs. STRD

• A friend by the name of Rhino, mentioned that STRD and SATA have been trading pretty closely. This is a function of the Bitcoin coverage for each of these products. The coverage ratios are similar, which open up arbitrage opportunities. Think going long SATA, and buying OTM puts on STRD, or going long STRD and short SATA as a hedge against Bitcoin price.

STRC Only:

Buck - Savings Coin Backed by STRC @BuckToken

• The $300B+ stablecoin market earns 0% yield. Buck yields 10%, insulates from volatility, and integrates into DeFi lending, leveraging, and yield speculation. Save in crypto-native wallets, and build your own leveraged profile.

FX Hedged STRC

• The deepest liquidity for all Digital Credit will be STRC trading on the Nasdaq. Issuers can offer this liquidity to markets around the world by packaging an interest rate swap with STRC and issuing it as an ETF.
• BRL STRC yielding ~23% in Brazilian real @MasonFoard @MeliuzBitcoin
• JPY STRC yielding ~8.5% in Japanese yen

STRC Total Return Swap

• You can transfer the volatility and risk of STRC between two parties in the form of a total return swap contract. Such products have been used to create synthetic, leveraged exposure for ETFs like MSTX and MSTU.

STRC 2x

• Buy $2 of STRC with $1 borrowed at SOFR + 100 BPS. The yield on this instrument is 18.5%, with 2x the volatility of STRC. The issuer must have low margin requirements against the STRC, ideally 25%. If STRC sells off to $75, there will be auto-deleveraging and investors will be hurt, this is the risk.

STRC 5x with MSTR Puts

• There are people who want absolute max yield, with an imperfect hedge. The STRC options market is completely illiquid, therefore MSTR’s option market is the next most likely candidate. Leverage STRC through a prime broker or create a TOTAL RETURN SWAP then hedge with OTM MSTR put options. The puts will decay, and there will be volatility and potential de-leveraging. The hedge is necessary to take on this level of STRC exposure without blowing up the fund.

STRC Put Selling

• As the STRC options market matures, selling STRC put options will become a way to leverage STRC’s yield. This will require active management via put option rolling. The annualized yield on rolling monthly STRC puts at the money is currently > 12% APY. I expect this to always be greater than the dividend yield because STRC will never be perfectly 0% volatility.

STRC creates a vacuum into which all money seeking returns and yield will flow.