Saylor Explains Why Credit Investors Prefer Cash Over Bitcoin

Bitcoin alone as collateral was insufficient to prop up Strategy’s 12% yield preferred stock at the $100 target, Michael Saylor acknowledged. Credit investors demanded a cash reserve before they would come back.

Saylor, the executive chairman of Strategy, made this admission at the ParaFi Investor Day. In the same talk, however, he referred to digital credit as the strongest credit in the world.

Why Credit Buyers Wanted More Than Bitcoin as Collateral

At the ParaFi Investor Day this week, I presented an overview of digital capital, credit and equity, and then joined Jeff Park (@dgt10011) for a fireside chat on digital assets, digital intelligence, and the future of finance.

— Michael Saylor (@saylor) October 17, 2026

Strategy’s perpetual preferred stock is called Stretch, ticker STRC. It offers a 12% annual dividend and aims for a $100 share price.

Early in the summer, STRC fell below par and later dropped to about $75. The company reacted by establishing a US dollar dividend reserve and a share buyback program.

Saylor said the company bought back roughly $1.5 billion of STRC, bringing it back to within pennies of par.

The episode changed his view on collateral. Saylor said credit buyers prefer to see three years of cash rather than 30 years of Bitcoin.

How Saylor’s Bitcoin Experience Reshapes Digital Credit

Saylor now characterizes digital credit as a blend of capital and cash.

“If you created it as 98% Bitcoin and 2% cash, it tends to buckle. If you make it 70% Bitcoin and 30% cash, think of stainless steel.”

— Michael Saylor

As a result, Strategy now holds about three and a half years of dividends in cash, according to Saylor. The company also wants to pay STRC dividends on a daily basis, pending shareholder approval.

Saylor also expects STRC to eventually trade at 400 to 500 basis points above the risk-free rate. He noted that would be about 200 to 300 basis points tighter than current levels.

Meanwhile, the focus on cash comes at a cost. In recent weeks, Strategy has spent more on buybacks than on acquiring new Bitcoin.

Gold advocate Peter Schiff argues the company has lost its Bitcoin-buying capacity. Saylor sees it differently. He noted that credit investors typically require a three-year history, while digital credit is only in its second year.

In the end, Saylor’s Bitcoin-based credit model now relies on dollars to attract income investors. He said digital credit must prove it can withstand bear markets before it gains broader acceptance.