Strategy's Dollar Duration Falls to 3.4 Years as STRC Credit Rises to 53 Basis Points

Strategy's dollar duration fell to 3.4 years from 3.5 a week earlier, while its modeled Bitcoin credit measure for STRC rose to 53 basis points, marking a modest shift in its financing metrics.

Dollar duration measures how many years of annual interest and preferred dividend obligations Strategy's dollar assets would cover. The calculation divides those assets by the annual obligations and assumes the designated dollar reserve is not used for other payments that may come due, including convertible debt maturities.

The STRC credit figure rose from 52 basis points a week earlier. Strategy's latest Bitcoin risk calculation used a Bitcoin (BTC) reference price of $81,468, a 10% assumed annualized return and 40% volatility. The prior calculation used a $82,252 Bitcoin price with the same return and volatility assumptions.

STRC is Strategy's variable-rate perpetual preferred stock. Its dividend rate can be adjusted monthly to support trading near its $100 stated amount. The 53-basis-point figure comes from Strategy's Bitcoin risk model; it is separate from a spread implied by STRC's market price and is neither an outside credit rating nor a measure of liquidity.

As of Oct. 18, Strategy held about $5.3 billion in dollar assets, comprising a $4.83 billion reserve and $447.3 million in cash. It repurchased $193 million of STRC from Oct. 12 through Oct. 18, following about $176 million in earlier STRC repurchases.

On Oct. 19, Strategy announced an increase in its digital credit securities repurchase authorization to $3 billion from $2 billion.