Woofun AI reports that Strategy has activated a digital credit capital framework to address a six-week confidence crisis, raising the STRC annual dividend yield to 12% while authorizing up to $1.25 billion in Bitcoin sales. This move follows a 50% decline in MSTR stock from its peak and a drop in STRC to a historical low of $74, representing a 26% discount to its $100 par value.

The liquidity pressure escalated after May 15, when Strategy repurchased $1.5 billion of 2029 convertible bonds using funds earmarked for dividends, slashing cash coverage from 24 months to roughly six months. In late May, the company sold 32 BTC for the first time since 2022, a move the market interpreted as a signal of tightening cash flow despite the small volume. Subsequent actions included an ATM sale of over 12.66 million MSTR shares raising approximately $1.15 billion, while Bitcoin purchase volumes sharply decreased as capital was diverted to pay STRC dividends.

Woofun AI data shows that by June 26, the 90-day correlation coefficient between STRC and Bitcoin surged to nearly 0.70, the highest level since the product launched in July 2025. The new framework mandates hard coverage rules requiring dollar reserves to cover at least 12 months of expected expenditures, a threshold currently met with $2.55 billion in reserves against $1.76 billion in annualized costs. Management also secured a $2 billion repurchase authorization and a dynamic assessment mechanism for dividends to prevent excessive future cash flow pressure.

Critically, the board formally included Bitcoin in the capital management toolbox, permitting sales to supplement reserves or fund repurchases if specific conditions are met. Delphi Digital analysis indicates that with mNAV below 1x, the cost transmission channel has shifted to common shareholders, who face dilution from the ATM issuance while preferred stock solvency is prioritized. This structural shift marks a departure from the 'never sell Bitcoin' narrative, transforming the asset into a monetizable tool for credit maintenance.

Market reaction was mixed, with MSTR closing up 12.6% and STRC rising 12.2% to $83.67 on the announcement day, though STRC remains at a 16% discount to its target range. While Benchmark Equity Research maintained a buy rating with a $570 target price, analysts like Zach Pandl argued that selling over $3 billion in Bitcoin would be more effective than a 50 basis point yield increase. Conversely, critics such as @MengLayer noted that selling Bitcoin below the average holding cost of $75,700 constitutes a low-cost asset liquidation that weakens the investment thesis.

Broader market sentiment reflects deep skepticism, with U.S. spot Bitcoin ETFs recording a net outflow of $1.79 billion in the week ending June 26, the second-largest weekly outflow in history. Global non-mining listed companies reduced net Bitcoin buying to just $14.65 million, an 83% week-on-week drop, while leveraged MicroStrategy ETFs have declined over 90% since their 2024 launch. This divergence suggests that while the framework may provide short-term liquidity relief, long-term confidence hinges on Bitcoin price recovery and the ability to service dividends without further dilution.