Latest news: Digital credit products linked to Strategy’s bitcoin-backed ecosystem suffered sharp declines last week before partially recovering.
- Strategy’s preferred equity financing vehicle, STRC, fell as low as $82.53 on Thursday before recovering to about $90.50, according to Strive Chief Risk Officer Jeff Walton.
- Strive’s SATA fell to the low $90 range before recovering to around $98.59.
- Walton attributed the move to leverage sell-offs and heavy selling pressure rather than deterioration in underlying credit quality.
- CEO Matt Cole previously described the episode as a “leverage liquidation event, not a credit failure.”
- CoinDesk’s Jennifer Sanasie interviewed Strive Chief Risk Officer Jeff Walton about public keys.
What happened: Strive’s analysis points to forced selling rather than a collapse in decentralized financial markets.
- Walton said trading data suggests holders sold the instruments, triggering selloffs in other traditional financial markets.
- He said the event did not appear to originate from DeFi protocols.
- The liquidation came amid unusually large trading volumes in both securities.
- Walton characterized volatility as part of the maturation process of a new asset class.
The history of liquidity: Strive maintains that the market’s ability to absorb large trading volumes is a positive sign.
