The decline in Strategy’s dividend-bearing crypto stock is attributed to several factors, pushing it to near-historic lows. Strategy’s bitcoin-backed preferred stock, STRC, continues to trade significantly below its par value due to worries about dividend sustainability and rising competition from Strive’s SATA. On Tuesday, STRC closed at $91.79, marking its third-lowest closing price since its inception, and is currently trading about 8% under the $100 par value it was designed to maintain.

Investors are leaning towards Strive’s SATA, which offers a more attractive yield, daily dividend payouts, and operates without any debt. The preferred stock STRC has been consistently underperforming, with its price dropping to as low as $88.60 during its initial trading month.

Originally priced around $90 at launch, STRC was expected to trade close to its $100 par value. However, it has been unable to reach that level since May 15, when it last went ex-dividend. In the past, STRC would typically approach its par value before the ex-dividend date, but the stock has failed to bounce back after the last ex-dividend.

Several underlying issues are impacting STRC’s performance. Its price is closely linked to bitcoin, which is currently facing downward pressure at around $65,000—approximately 50% lower than its all-time high from October. Additionally, there are mounting concerns regarding dividend coverage, as the company has only about seven months of dividends left after repaying $1.5 billion in convertible debt, which previously allowed for up to 24 months of coverage.

Meanwhile, Strive’s SATA has been enjoying stability, trading near its $100 par value with an annualized yield of approximately 13%, compared to STRC’s 11.5%. SATA also benefits from daily dividend payments and a lack of debt, positioning it favorably for investors seeking income. The gap between STRC and SATA has widened significantly, with STRC currently trading at an $8.20 discount to SATA, the largest discrepancy recorded.

Given STRC’s annualized yield of around 12.53%, the market suggests that an increase of about 100 basis points in STRC’s dividend rate may be necessary to boost demand and align its trading price closer to the desired $100 par value. In May, the combined exchange volumes saw a decline of 3.45% to $4.41 trillion, the lowest since September 2024, while RWA perpetual futures volumes experienced a 10.4% increase, reaching a new all-time high.