STRC Yield Play: How Fed Rate Cuts Could Drive Billions Into Strategy’s Bitcoin Machine

TLDR:

• STRC faces a major tailwind as U.S. money market funds lose $233.7 billion annually from a projected 300bps rate drop
• STRC pays 11.25% annually with $2.25 billion in cash reserves covering over 2.5 years of dividends at 5.6x overcollateralization
• A 0.5% rotation from money markets into STRC could generate $2–$4 billion, funding the purchase of up to 80,000 Bitcoin
• Strategy’s Bitcoin holdings could grow 13%–34% if STRC scales to $10–$20 billion in notional value by the year 2028

STRC, Strategy’s Variable Rate Series A Perpetual Preferred Stock, is drawing growing institutional attention as the Federal Reserve advances its rate-cutting cycle into 2026.

U.S. money market funds now hold $7.79 trillion, currently yielding between 4.5% and 5%. Analysts project yields on those funds could fall by 300 basis points.

That drop could push hundreds of billions toward high-yield alternatives. Trading near $100 par on Nasdaq and paying 11.25% annually, STRC stands positioned at that crossroads.

Fed Rate Cuts Threaten Hundreds of Billions in Annual Income

U.S. money market fund yields remain elevated from the prior rate-hiking cycle. However, the Fed has already moved 125 basis points into the current easing cycle, with markets pricing in another 75–100 basis points ahead.

Analysts expect front-end yields to compress toward 1%–2%, replicating the post-2008 and 2020 patterns.

A 300-basis-point decline across $7.79 trillion in money market assets equals roughly $233.7 billion in lost annual income.

Pensions, insurers, and corporate treasuries cannot simply absorb that loss. They are historically known to pursue higher-yielding alternatives when safe returns erode.

EPFR and McKinsey data indicate that for every 100-basis-point drop in short-term rates, alternative and high-yield vehicles see 10%–20% accelerated inflows within 12–18 months.

A 5%–10% rotation out of money markets alone could direct $390–$780 billion toward private credit, listed preferred stocks, and similar instruments.

STRC Positioned to Capture Institutional Yield Demand

STRC currently trades at $99.82 with an effective annual yield of 11.27%, paying dividends every month. Its notional value already stands at $3.458 billion. Average daily trading volume runs at approximately $128 million, reflecting growing market participation.

Analyst Adam Livingston wrote on X: “STRC sits at the perfect nexus because it’s liquid, high-yield, and structurally engineered to vacuum up the dumbest, most desperate money on Earth.”

He added that Strategy holds $2.25 billion in cash reserves, covering more than 2.5 years of dividends at 5.6 times overcollateralization.

If only 0.5% of projected capital rotation flows into STRC, that equals $2–$4 billion in new capital. At $100 par, that creates 20–40 million new shares issued. Proceeds from those shares go directly toward Strategy’s Bitcoin acquisition program.

Bitcoin Supply Could Face Pressure from STRC’s Expansion

Each $1 billion raised through STRC issuance allows Strategy to purchase approximately 14,700 Bitcoin at a $68,000 spot price.

A $4 billion capital inflow translates to roughly 58,800–80,000 additional Bitcoin removed from the open market.

Strategy currently holds 717,000 BTC. Analysts project STRC could scale to $10–$20 billion in notional value by 2028.

That growth range would add an estimated 95,000–242,000 Bitcoin to Strategy’s treasury, a 13%–34% increase in total holdings.

That accumulated buying would represent 8%–11% of annual Bitcoin issuance. Livingston noted: “Do that at scale and you’re talking supply-shock math that makes ETF inflows look quaint.”

Post-GFC private credit grew more than seven times as rate cuts redirected capital toward yield-bearing alternatives, and Bitcoin compounded sharply during each of those liquidity-driven periods.

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