Two opposite stories ran in parallel this week.

Story one: STRC kept falling. STRC touched a new all-time intraday low of $82.53 before recovering to close Tuesday at $87.31. The variable rate peg has now failed for two consecutive months at deeper and deeper levels. SATA also broke below par, closing Tuesday at $94.50, a 2.90% decline on the day.

Story two: the credit thesis kept getting stronger. Strategy's USD Reserve grew from $1.1 billion to $1.4 billion in a single week, a $300 million jump. The June 22nd 8-K explicitly states the reserve build is meant "to support the credit quality of its Digital Credit securities." Phong Le, Strategy's President and CEO, personally purchased $1 million of STRC on June 22nd at depressed prices. And for the first time, Strive outbought Strategy on a weekly basis, acquiring 759 bitcoin to Strategy's 520.

The price action and the structural action moved in opposite directions this week. Let's get into it.

The universe widened across every instrument this week. STRD's 16.52% yield is the highest level any instrument in this category has ever traded at. STRC broke the previous record low set just last week. STRF gave up the $93 handle. Even SATA, which had successfully reclaimed par the week daily dividends went live, gave it back in the second week of trading.

Strategy (Nasdaq: MSTR, STRC, STRF, STRK, STRD). Fourth consecutive week of zero preferred issuance. Fourth consecutive week of USD Reserve growth. First week where the buying pace really slowed.

The June 22nd 8-K disclosed that Strategy purchased 520 bitcoin between June 15th and June 21st at an average price of $67,068 for approximately $34.9 million. That is a sharp deceleration from the 1,587 bitcoin acquired the prior week. Total holdings now stand at 847,363 bitcoin at an aggregate cost of $64.10 billion, or $75,651 per coin average.

The more significant number is the USD Reserve. It grew from $1.1 billion as of June 14th to $1.4 billion as of June 21st, a $300 million increase in seven days. The filing explicitly states: "Strategy plans to continue replenishing the USD Reserve over time based on market conditions to support the credit quality of its Digital Credit securities."

This is a structural shift. The MSTR ATM raised $335.5 million in net proceeds during the period, but only $34.9 million went to bitcoin purchases. The remaining roughly $300 million went to growing the USD Reserve. For roughly a year, the operating model was simple: MSTR ATM proceeds funded bitcoin acquisition. The mix changed this week. Most of the capital is now going to credit support, not accumulation. STRC, STRF, STRK, and STRD all showed zero issuance for the fourth consecutive week.

Strategy also made the strongest insider buying signal in its capital markets history. On June 22nd, Phong Le, President and CEO, personally purchased 11,000 shares of STRC for approximately $1 million at depressed prices. Le publicly stated his intent to "hold the position until it returns to its intended $100 par value and may continue holding it beyond that level." Saylor followed with a post on X declaring "Digital Credit is income for investors who believe in Bitcoin."

The STRC peg failure deepened despite all of this. STRC traded to an intraday low of $82.53 during the week before recovering. The current rate stays at 11.50%, with the first semi-monthly record date on June 30th and the first semi-monthly payment on July 15th.

Strive (Nasdaq: ASST, SATA). The week Strive outbought Strategy.

The June 22nd 8-K disclosed that Strive purchased 759 bitcoin between June 15th and June 21st at an average price of approximately $65,850 per coin for approximately $50 million. Total holdings now stand at 19,864 bitcoin, approaching the 20,000 threshold. This was Strive's largest single-week acquisition in months and the first time the smaller treasury company out-accumulated Strategy on a weekly basis.

Matt Cole, Strive's CEO, told Bloomberg this week that "Strive has been buying bitcoin hand over fist" and that the company "4x'd our bitcoin holdings operating in a bear market." Cole separately projected that the digital credit market for bitcoin-backed preferreds could grow to $3 trillion, citing the global credit market's roughly $300 trillion total addressable size.

Cash and cash equivalents grew from $141.4 million to $144.5 million as of June 18th. SATA shares outstanding grew by 315,595 during the period, indicating roughly $30 million in SATA ATM issuance over the week. Class A common share count grew by approximately 1.9 million shares. Strive also continues to hold 505,000 shares of STRC on its own balance sheet, currently valued at $44.7 million, down from $47.9 million the prior week due to STRC's decline.

SATA closed Tuesday at $94.50, down 2.90% on the day, after maintaining $99.99 the prior week. The 13.00% rate held. The daily dividend mechanism is still operating exactly as designed. But broader market pressure on the asset class pulled SATA down with it. The takeaway is that daily dividends are a great structural improvement.

The credit thesis is more right than ever. The price action is going the other direction. Both can be true.

For three issues running we have argued that Strategy is positioning its preferred stack for an investment grade rating outcome. The evidence keeps accumulating. This week added three of the strongest data points yet.

The USD Reserve grew $300 million in seven days. This is a deliberate redirection of the company's primary capital flow away from bitcoin accumulation and toward dividend coverage. The 8-K language explicitly states the reason: "to support the credit quality of its Digital Credit securities." For rating agencies evaluating the senior preferreds, that is the cleanest possible disclosure. Credit support is being prioritized over growth. That is what investment grade issuers do.

The CEO personally bought a million dollars of STRC at a depressed price. Phong Le's purchase is the rarest signal in capital markets: an executive putting personal money behind a security his company issues, at prices substantially below par, with an explicit hold-to-par commitment. Insider buying at distressed prices is the second-strongest credit signal an issuer can provide, behind only an actual rating upgrade. This is exactly the move a CEO makes when he believes the market has dislocated the security from its underlying credit quality.

The preferred ATM stayed offline for the fourth consecutive week. STRC capacity sits at $17.5 billion untapped. Strategy is preserving its preferred issuance optionality for stronger market conditions rather than chasing capital into a discounted instrument. That is disciplined credit management. The market is treating it as weakness because the buying pace slowed. We think it is the opposite.

So why is the price still falling? Three reasons.

First, the credit thesis takes time to play out. Rating agency processes do not move on weekly cycles. The data Strategy is producing this week becomes evidence in a credit review process that could take months. In the meantime, the market is trading the instrument on yield, not on credit.

Second, the SATA comparison. Strive's product is structurally better at the variable rate preferred job. Daily dividends, debt-free balance sheet, higher stated rate, no convertible obligations sitting senior. Even with SATA falling below par this week, the cleaner product is winning the structural comparison. STRC is rebuilding while SATA is operating.

Third, the broader bitcoin tape is doing real damage. BTC at $62,800 down from $80,000 in early May creates pressure on every bitcoin-backed instrument regardless of issuer-specific positioning. Some of STRC's decline is the asset class, not the issuer.

For instrument selection, the read updates this week.

STRC is the harder call again, with a stronger thesis. At $87.31 with a 13.17% effective yield, the CEO's personal purchase establishes a clear insider signal at this price level. The setup now looks like a credit-thesis trade with a defined catalyst: rating agency commentary, semi-monthly dividend behavior, and the USD Reserve buildup all matter on the same timeline. The risk is that the market keeps treating STRC as a broken yield product before the credit thesis plays out.

STRF at $90.52 with an 11.05% yield is increasingly the most attractive instrument for credit-focused buyers. Senior to STRC, cumulative, fixed coupon. If the rating upgrade thesis is correct, STRF benefits the most and benefits first.

SATA at $94.50 with a 13.76% effective yield is now back in the high-conviction long category but for a different reason than last week. Daily dividends did not act as a price floor. They acted as a structural improvement. The bigger story this week is that Strive outbought Strategy on bitcoin acquisition, and Matt Cole's $3 trillion digital credit framing aligns with Saylor's. The asset class is gaining institutional vocabulary on both sides.

STRK and STRD continue to widen at the bottom of the stack. STRD at 16.52% is the highest yield ever recorded in this category. We covered STRK in Issue #003's Standout. The same thesis applies, more so this week.

The thesis going into next week. The credit signaling argument is doing exactly what credit signaling does. It generates evidence that compounds over time, regardless of price action in the short term. The market is wrong about STRC right now, in our view, but it can stay wrong longer than is comfortable. The June 30th semi-monthly dividend launch and any rate decision around that time are the next two catalysts. Watch them carefully.

The strongest signal an issuer can send to a market that has stopped listening.

On June 22nd, Phong Le, President and CEO of Strategy, filed a Form 4 disclosing the purchase of 11,000 shares of STRC for approximately $1 million. The buys occurred at depressed prices around the all-time low. Le publicly stated his intent to hold the position "until it returns to its intended $100 par value" and indicated he may continue to hold beyond that.

This is the single most important data point in the asset class this week and probably this month.

As mentioned above, insider buying at depressed prices is one of the cleanest signals in capital markets. The executive has both the most complete information about the issuer's financial position and the most direct exposure to the consequences of being wrong. When an executive uses personal money to acquire shares of his own company's distressed security, with an explicit hold-to-par commitment, the market should pay attention.

Three reasons this signal matters more than a typical insider buy.

First, the specific instrument. Le did not buy MSTR common. He bought STRC specifically. That is a directional bet on the variable rate preferred recovering toward its peg, not a generic vote of confidence in Strategy's overall business. He is calling the bottom on the specific instrument the market has decided is broken.

Second, the timing. Le bought in the same week that Strategy disclosed a $300 million USD Reserve buildup explicitly designed to support digital credit quality. The institutional message is: we are putting reserves behind these instruments. The personal message is: I am putting my own money behind them too. Aligned signaling like this is rare and meaningful.

Third, the explicit commitment. Hold-to-par language is unusual in insider disclosures. Most insiders do not telegraph their exit strategy. Le did, and the exit strategy is $100. That commitment effectively turns the purchase into a public position the market can evaluate against. Either STRC returns to par and Le's call ages well, or it does not and the CEO carries the loss publicly.

For STRC holders at current prices, this is the strongest possible alignment signal short of a rating upgrade. For prospective buyers, $87.31 is now a price the CEO has personally validated as an attractive entry. The credit thesis we have been making for three issues just got direct insider confirmation.

The Standout this week goes to Le's STRC purchase because it is the cleanest single signal of insider conviction in a depressed instrument we are likely to see this year.

Key dates ahead:

Watch list:

No new BTC preferred S-1s on file from third-party issuers as of this writing.

There’s no hiding it, it was a tough week for digital credit and bitcoin in general.

STRC fell again. The CEO bought it personally. The USD Reserve grew $300 million. Strive outbought Strategy for the first time. SATA broke par. Every one of those is a significant signal and they don't all point the same direction.

The Dodgers and Yankees thing is holding up. Strategy is the Dodgers, slowly and methodically restructuring their cap stack, betting the credit thesis plays out over months. They just had a tough loss but the bullpen is rebuilding for the long season. Strive is the Yankees, still throwing structural punches, still putting up the numbers, still aggressive on the market. Both teams are showing up to the postseason. The question is which approach proves out across a full cycle, and I still genuinely don't know.

What I do know is that this is the kind of week that separates real subscribers from people who only read newsletters when the news is simple. The story is complicated. The signals are mixed. The price is moving against the structural read. If you stayed with me this far, you're who I'm writing for.

If this was useful, forward it to someone. If something looks off, reply and tell me. The inbox is always open.

See you next week.

- Halston Valencia

Head of Operations, BitcoinQuant