Bitwise CIO Says Strategy’s STRC Selloff Signals Bitcoin Nearing Market Bottom

Bitwise Chief Investment Officer Matt Hougan says the recent selloff in Strategy’s STRC preferred stock reflects a natural end-of-cycle unwind rather than a deeper crisis. STRC, which targets a $100 par value, fell as low as $75 as bitcoin dropped below $60,000 in late June, its lowest level since 2024. Investors had grown uneasy about whether Strategy could continue funding the instrument’s dividend payments.

Strategy’s Balance Sheet Remains Strong, Hougan Says

Strategy holds about $49.6 billion in bitcoin and $2.6 billion in cash against $6.8 billion in debt and $15.5 billion in preferred equity, enough, Hougan said, to cover 28 years of dividend obligations if the bitcoin were sold today. On June 29, Strategy introduced a new framework letting STRC trade at a variable price instead of defending par, a move that sent both MSTR and STRC higher.

Institutional Buyers Seen Leading Next Phase

Hougan said Strategy’s dominance as bitcoin’s main buyer is likely fading, with institutions such as Morgan Stanley and Wells Fargo, along with state level reserves and ETF inflows, expected to drive future demand. He dismissed liquidation fears, saying bitcoin would need to fall more than 70% and stay there for years to threaten the company.

Bottom Signals To Watch

Hougan compared the STRC unwind to the 2021 GBTC premium collapse and said he is watching for MSTR trading below net asset value, extreme fear readings, and negative funding rates as signs of a market bottom, with a new bull run possible by fall.