Strive CEO Matt Cole said digital credit saw its hardest session yet after sharp moves in STRC and SATA.
Summary
- Cole said STRC and SATA fell on forced selling, not weaker credit quality.
- STRC dropped to $82.50 while SATA fell to low $90s before recovering intraday on Friday.
- Strive says reserves remain intact as digital credit investors review leverage and liquidity risks.
In a post on X, Cole said it was “the most difficult day in the history of Digital Credit.” STRC fell as low as $82.50 before recovering, according to Cole. SATA also dropped from par to the low $90s before rebounding. Jeff Walton later said on X that SATA had hit $92.88 intraday before recovering to $97.71.
The moves drew attention because both products sit inside a new market for preferred equity-style digital credit. That market links income products with Bitcoin treasury strategies and public market structures.
Cole separates liquidation from credit risk
Cole said the selloff was “a leverage liquidation event” and “not a deterioration in underlying credit quality.” He said forced selling appeared to drive the fall after leveraged investors came under pressure.
He compared the move with past income-market stress in traditional finance, where investors borrow against assets viewed as stable to lift returns. When prices move against them, margin pressure can force sales and push prices lower.
Cole said the selling became disconnected from the underlying credit profile. He added that Strive’s dividend reserves remain intact, the company is not under stress, and the firm remains able to meet its obligations.
“A liquidation event and a credit event are not the same thing,” Cole said. He also said there was strong demand near intraday lows, with both STRC and SATA drawing buyers after the sharp drop.
Strive’s digital credit push adds context
As previously reported by crypto.news, Strive listed SATA on Nasdaq as part of its Bitcoin treasury and digital credit strategy. The company said SATA raised $160 million through a 2 million-share initial public offering.
Crypto.news earlier reported that Strive held 7,525 Bitcoin after the SATA listing. The company described SATA as a variable-rate preferred equity product tied to its wider plan to grow Bitcoin per share over time.
Strive has also said SATA aims to trade in a target range of $99 to $101. The company’s website says SATA carries a 13% annual dividend rate and moved to business-day dividend payments from June 16.
Strive has presented digital credit as a way to pair income products with Bitcoin-backed corporate finance. The sharp session now puts attention on how these products trade when investors use leverage.
Market watches leverage and liquidity
Cole said the day showed how leverage can create stress even when issuers say credit quality remains unchanged. He said investors, issuers, and market participants may learn from the event while the market is still small.
The price action also showed how quickly income products can move when forced selling reaches thin markets. A fall below par can draw buyers, but it can also raise questions about liquidity, leverage, and market depth.
For Strive, the main message from management was that the company remains stable. Cole said the firm’s reserves are intact and that the underlying credit profile had not changed from before the volatility.
For investors, the next test is whether STRC and SATA can hold their recoveries after the liquidation pressure fades. Trading near the $99 to $101 range would support Strive’s stated market goal for SATA, while further volatility would keep attention on leverage across digital credit products.
