Strive CEO Matt Cole stated that the steep declines in Strategy’s STRC and Strive’s SATA tokens were caused by a forced liquidation cascade among leveraged investors. He emphasized that the underlying financial fundamentals of the issuers remained intact, comparing the event to past leveraged Treasury trade blowups. Both tokens partially recovered from their lows as buyers returned to the market.
Strive CEO Matt Cole stated that a sharp sell-off in the tokens was a leverage liquidation event. He argued it was not caused by a deterioration in the underlying credit quality of the issuers.
The volatile session saw Strategy‘s STRC drop to $82.50 and Strive’s SATA fall into the low $90s. Both tokens later recovered as buyers stepped back into the market.
Cole drew a parallel to past blowups in leveraged U.S. Treasury trades. He noted those failures were related to investor overextension, not the creditworthiness of the Treasuries themselves.
Regarding Strive’s specific situation, Cole said the firm’s dividend reserves were untouched and the company was under no strain. He said leveraged flushes can happen because collateral appears stable enough to invite excessive risk-taking.
When questioned about STRC’s weaker price performance prior to the crash, Cole conceded demand had softened. He cited a weak Bitcoin market and investor unease around Strategy‘s recent corporate moves.
“If a security has billions of dollars of demand from long-only institutions, that is very different from demand driven by highly leveraged buyers,” Cole noted. He explained leveraged demand can create a sharper unwind during price declines.
Market data showed STRC recovered to around $89, still below its $100 par value. SATA held up somewhat better, trading just above $97 at the time of reporting.
Strategy has stated its Bitcoin treasury, valued at approximately $53 billion, can cover dividends for 32 years. The firm has about $1.7 billion in annual dividend obligations.
