---
title: "STRC Will Become a Part of Common Investor Vocabulary"
author: "Dan Hillery"
author_url: "https://tnorth.com/crew/dan-hillery/"
publisher: "True North"
publisher_url: "https://tnorth.com"
canonical_url: "https://tnorth.com/research/strc-common-investor-vocabulary/"
markdown_url: "https://tnorth.com/research/strc-common-investor-vocabulary.md"
date_published: "2026-03-31"
date_updated: "2026-03-31"
rendered_at: "2026-05-02T14:13:21.989Z"
section: "research"
tickers: ["MSTR", "STRC"]
instruments: ["MSTR", "STRC"]
asset_class: "perpetual-preferred-equity-bitcoin-backed"
word_count: 570
reading_time_minutes: 3
license: "© 2026 True North. Cite with attribution and a link to the canonical URL. Not investment advice."
disclosure: "True North is operated by Strive, Inc. Independent contributor content published under https://tnorth.com/legal/independent-discussion/."
tldr_generated: true
---

# STRC Will Become a Part of Common Investor Vocabulary

> **TL;DR.** Dan Hillery argues that STRC is not just a high-yield instrument — it creates the first liquid, free-market rate for short-term Bitcoin-backed credit, positioning it as the benchmark rate for a new asset class.
> — Dan Hillery, True North (https://tnorth.com/research/strc-common-investor-vocabulary/)

STRC is important not because of it's high yield, but because it creates a liquid free market rate for short term Bitcoin backed credit.

## BTC Credit Market

The Bitcoin lending market has been developing since 2013 with the launch of Bit bonds, the first global P2P lending using Bitcoin as a form of micro loans between participants.

The Launch of Salt Lending in 2016 and Unchained Capital's first private loan in 2017 were the genesis of what we know as the Bitcoin credit market.

The financing of Bitcoin is only 9 years old. Considering that Bitcoin is a forever capital instrument, there are decades of work that will go into building out the financing of Bitcoin itself.

## Before STRC:

There are a whole host of secured loans offered against Bitcoin with interest rates ranging from 10% to 14%. These loans come with liquidation risk and are non transferrable. Unlike a mortgage backed security, these loans are not priced by the open market, and therefore don't provide a good measure of the "Bitcoin Risk Curve."

## Preferred Launch:

The launch of Strategy's suite of preferred equities attempted to build out the duration curve of Bitcoin backed credit.

![Strategy's Perpetual Preferred Bitcoin Duration Curve](/images/articles/strc-common-investor-vocabulary/duration-curve.jpg)

How? By offering products that are unable to be liquidated as a result of Bitcoin's price volatility, trade freely on the open market, and are backed by audited Bitcoin reserves. All other Bitcoin backed credit products face solvency risk, and are not liquid across markets.

The introduction of such a BTC backed product had to be done via the US public markets because it was the only way to enforce institutional security and audibility for a product - requiring trust on top of the Bitcoin network (credit).

## STRC Ingredients:

1. Publicly Traded
2. ATM Capability
3. Variable Rate Dividend based on trailing VWAP price
4. Unsecured & Over collateralized by Bitcoin
5. Issuance Capacity (MSTR ATM)

Above are the 5 ingredients which were necessary to create the short duration risk curve for Bitcoin. The omission of any one of these ingredients would prevent STRC from serving as this market rate.

## STRC is Special, More than a stock, It's a Market Rate.

STRC allows the market to price the risk of BTC collateral in real time via an expectation of MSTR solvency.

Ultimately to issue BTC credit, someone takes on custody risk whether that be smart contract implementation, a bank as a lender, etc. The lender ideally has the least amount of corporate risk, so that the yield on the fixed income instrument is purely based on BTC price expectations & volatility.

Strategy is uniquely positioned as the de-facto issuer of such an instrument because of its public markets liquidity. As mentioned above, the STRC ATM caps the price of STRC in the targeted range. Assuming sufficient demand, the issuer must also be able to expand their BTC collateral stack to increase capacity for the credit. This is where the MSTR common atm comes into play for collateral expansion. Liquidity for issuance is imperative for both of these components.

STRC would not be able to exist if it weren't for MSTR's common ATM.

Balance sheet expansion is absolutely necessary for STRC's ATM.

---

STRC is a unique product in capital markets and will be viewed as the "short term rate of BTC," fluctuating based on BTC expectations across cycles.

![STRC's Adjusted Sharpe Ratio over Time](/images/articles/strc-common-investor-vocabulary/sharpe-ratio.jpg)

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