Latest developments: Digital credit products linked to Strategy’s bitcoin-backed ecosystem suffered steep declines last week before partially recovering.
- The strategy’s preferred equity financing vehicle STRC fell as low as $82.53 on Thursday before rebounding to around $90.50, according to Strive Chief Risk Officer Jeff Walton.
- Strive’s SATA dipped to the low $90 range before turning around $98.59.
- Walton attributed the move to capitalizing on liquidations 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 sales rather than a collapse of decentralized financial 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 sale occurred amid unusually large trading volumes across both securities.
- Walton characterized the volatility as part of the maturing process of a new asset class.
Liquidity history: Strive argues that the market’s ability to absorb large trading volumes is a positive signal.
