Strive says digital credit selloff was a liquidation event, not a credit crisis
Latest developments: Digital credit products tied to Strategy’s bitcoin-backed ecosystem suffered steep declines last week before partially recovering.
- Strategy’s preferred stock funding vehicle STRC fell as low as $82.53 on Thursday before rebounding to roughly $90.50, according to Strive Chief Risk Officer Jeff Walton.
- Strive’s SATA dropped into the low $90 range before recovering to about $98.59.
- Walton attributed the move to leverage liquidations and heavy selling pressure rather than deterioration in the 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 on Public Keys.
What happened: Strive’s analysis points to forced selling rather than a breakdown in decentralized finance markets.
- Walton said trading data suggests holders sold the instruments, triggering liquidations elsewhere in traditional financial markets.
- He said the event did not appear to originate from DeFi protocols.
- The selloff occurred amid unusually large trading volumes across both securities.
- Walton characterized the volatility as part of the maturation process for a new asset class.
The liquidity story: Strive argues the market’s ability to absorb large trading volumes is a positive signal.
- STRC traded roughly $950 million in volume on Thursday, according to Walton.
- SATA traded approximately $150 million in volume the same day.
- Walton contrasted those figures with BlackRock’s preferred securities ETF, PFF, which he said traded about $77 million in volume.
- He argued deep liquidity is critical for attracting institutional investors and supporting long-term adoption.
Reading between the lines: Strive sees digital credit as a much larger opportunity than current market participants appreciate.
- Walton said investors appeared to rotate between SATA and STRC as yields converged.
- He argued the products are easier to price and trade because markets can continuously assess risk and value.
- Strive believes digital credit could ultimately address a credit market worth roughly $300 trillion.
- Walton described the products as offering one of the most attractive risk-return profiles available in credit markets.
What comes next: Executives contend the recent volatility does not undermine the products’ long-term thesis.
- Walton emphasized that SATA and STRC are credit instruments, not stablecoins.
- He said Strategy’s balance sheet remains significantly healthier than during the 2022 bitcoin bear market.
- According to Walton, Strategy currently carries roughly 10% leverage compared with approximately 130% leverage during the prior cycle.
- He expects market participants to better understand the products over time and believes prices will gravitate back toward their $100 target levels.
AI Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards. For more information, see CoinDesk’s full AI Policy.
- 1
- 2
- 3
- 4
- 5
- 6
- 7
- 8
- 9
- 10
In May, combined exchange volumes fell 3.45% to $4.41T; the lowest since September 2024. RWA perpetual futures volumes rose 10.4% against the trend, hitting a new all-time high.
Jun 15, 2026
In May, combined exchange volumes fell 3.45% to $4.41T; the lowest since September 2024. RWA perpetual futures volumes rose 10.4% against the trend, hitting a new all-time high.
Why it matters:
In May, combined exchange volumes fell 3.45% to $4.41T; the lowest since September 2024. RWA perpetual futures volumes rose 10.4% against the trend, hitting a new all-time high.