Strategy buybacks drove over 20% of STRC weekly volume in September, Keyrock says
In brief
- Strategy buybacks topped 20% of weekly STRC volume in almost every September week, Keyrock says.
- Strategy's share peaked near 28% the week of Sept. 8, then fell below 20%.
- Strategy disclosed about $1.45 billion spent of a $2 billion authorization as of Oct. 4.
- STRC capacity falls to about 80% of reported volume without Strategy's buying, Keyrock estimates.
- Keyrock says its numbers don't show how much liquidity would vanish if buybacks stopped.
A deep market with a big buyer in it
STRC isn't a thin market. Keyrock's figures, as reported by CryptoSlate, put average daily volume at about $150 million. The firm found the security can typically absorb roughly $28 million in trading before its price moves 10 basis points, well ahead of Strive's SATA and Strategy's own fixed-rate preferreds (each had less than $3 million in comparable depth).
Keyrock used an illustrative execution rate of 20% of daily volume and estimated a $50 million STRC position could be liquidated in under two trading days. The same trade would take about five days in SATA. In Strategy's fixed-rate preferreds, it's six to eight weeks.
A meaningful slice of that STRC flow is Strategy itself.
The company's share of weekly volume hit about 28% the week of Sept. 8, per the report, before slipping to just under 20% in early October. Strategy had spent approximately $1.45 billion of its $2 billion repurchase authorization as of Oct. 4, leaving $547.2 million available, according to company disclosures cited by CryptoSlate. STRC, meanwhile, recovered from the mid-$70s in June to around $99.50 (close to its $100 reference price).
What the report does and doesn't show
Keyrock found that stripping out Strategy's buying cuts estimated STRC trading capacity to about 80% of reported volume. The firm was careful here, cautioning that the calculation doesn't establish how much liquidity would disappear if Strategy stopped buying. The repurchases are discretionary, and Strategy can modify, suspend or terminate the program.
An unnamed preferred-income manager interviewed for the report suggested some trading around STRC's $100 reference price comes from arbitrage firms and high-frequency traders responding to the issuer's activity. That's one manager's view, not a finding.
Liquidity thins away from par
Stress days look very different. On the worst 10% of trading days, Keyrock estimated STRC's depth within a 10-basis-point move fell from about $28 million to $6.5 million. The report also found STRC was about four times less liquid when trading 1% to 3% from par, and roughly eight times less liquid once the gap topped 6%.
Bitcoin's swings mattered less than you'd expect. Keyrock measured a 0.43 correlation between STRC's distance from par and market illiquidity, versus 0.10 for the magnitude of Bitcoin's daily price moves. CryptoSlate frames the whole picture as a hidden dependency: a $150 million-a-day market that leans, at least in part, on its own issuer's bid.
Frequently asked questions
How much of STRC's trading volume came from Strategy's own buybacks?
According to a Keyrock research report cited by CryptoSlate, Strategy's repurchases accounted for more than 20% of weekly STRC volume in almost every week of September. The share peaked near 28% the week of Sept. 8 and fell to just under 20% in early October.
What happens to STRC liquidity if Strategy stops buying back shares?
Keyrock estimated that removing Strategy's buying reduces STRC trading capacity to about 80% of reported volume. The firm cautioned that this doesn't establish how much liquidity would actually disappear if Strategy stopped buying. The repurchases are discretionary and can be modified, suspended or terminated.
How does STRC liquidity compare with other Bitcoin-linked preferred securities?
Keyrock found STRC can absorb about $28 million before a 10-basis-point price move, while Strive's SATA and Strategy's fixed-rate preferreds each had under $3 million in comparable depth. A $50 million STRC position could be liquidated in under two trading days, versus about five days in SATA and six to eight weeks in the fixed-rate preferreds.
