Bitcoin $10B credit market expands after June selloff

A June selloff that triggered margin calls and drove leading preferred shares below par did not halt activity in the roughly $10 billion market for corporate Bitcoin-backed credit. Dividend payments continued, trading volumes spiked and public treasury companies kept adding Bitcoin to their balance sheets.

Preferred-share programs from treasury companies such as Strategy and Strive were at the center of the June turmoil. These preferred securities typically carry a $100 stated value, pay fixed or variable dividends and have no maturity date. Investors had used leverage against the shares to amplify dividend income.

When Bitcoin fell below $60,000 in June, two large preferred issues moved sharply below par. Strategy’s STRC dropped to about $75 and Strive’s SATA fell to roughly $88. Forced margin liquidations began after June 18 and added to selling pressure even as scheduled dividends continued to be paid.

Strategy raised STRC’s annual dividend to 12% and announced a broader capital framework that includes a $2.55 billion cash reserve, authority to repurchase preferred shares and limited permission to sell Bitcoin. The company said the reserve would cover roughly 17 months of expected preferred dividends and interest payments. By the time trading paced lower, STRC had recovered to about $87 and SATA to about $97.

Trading volumes climbed during the repricing. Combined June volume for STRC and SATA exceeded $10 billion, with STRC accounting for $8.7 billion and SATA generating about $1.5 billion. Most of the activity was secondary-market trading between investors, and issuers did not raise significant new capital through at-the-market sales that month.

Despite the market stress, Strategy added a net 3,625 Bitcoin in June and Strive acquired 3,364 Bitcoin. Each company spent roughly $200 million that month on Bitcoin purchases.

On July 10, Tokyo-listed Metaplanet said it will study tokenized credit instruments in Japan with Siiibo Securities, yen stablecoin issuer JPYC and security-token platform Progmat. The proposal would explore products that use Bitcoin as backing or credit support and combine stablecoins for payments, security tokens for ownership records and Bitcoin as the supporting asset. Metaplanet holds about 43,000 Bitcoin.

Metaplanet described the potential this way: “Digital credit backed by Bitcoin could evolve into instruments traded and settled globally on a 24/7/365 basis, with interest and distributions accruing on a daily prorated basis according to the holding period.” The project is at an early stage and has not set issuance terms, distribution plans or a final legal structure.

Legal and structural questions remain unresolved for new products, including whether investors would have direct legal claims to the Bitcoin that underpins a security. That detail will determine whether instruments are formally secured by crypto assets or rely on an issuer’s broader balance sheet and reserves.

A survey from BitcoinTreasuries.net found 78% of respondents expect the digital credit market to grow through the end of 2027, and 22% projected outstanding supply could exceed $50 billion. The same survey showed 87% of respondents view digital credit favorably, 72% have invested in the sector and roughly three-quarters expect similarly sharp price declines could occur again.