A debate is spreading in the crypto market over Strategy's bitcoin-collateralised preferred share STRC. Some point to similarities with the high-yield structure of the TerraUSD (UST) stablecoin that collapsed in the past, keeping the argument over investment risks alive.

On March 13 local time, blockchain media outlet BeInCrypto reported that STRC is a floating-rate perpetual preferred share that currently offers an annual dividend of 11.5 percent based on a par value of $100. The product started at about 9 percent in July 2025 and its yield has risen steadily since. The high-yield structure has prompted comparisons with the Terra ecosystem, which drew investor funds with returns of about 20 percent in the past.

Terra is recorded as one of the biggest collapse events in the crypto market in 2022. The algorithmic stablecoin UST was designed to maintain a dollar peg through a mint-and-burn structure with its sister token, LUNA. But as confidence broke down, UST holders rushed to redeem, and new LUNA was issued in large volumes during the process, sending its price sharply lower.

The fall in LUNA's price then fed back into a loss of confidence in UST, creating a vicious cycle that triggered more redemptions and more LUNA issuance. In the end, a 'death-spiral' wiped out about $45 billion in market value in just a few days. Terra co-founder Do Kwon (권도형) was later sentenced to prison in a related fraud case.

Some market participants point to similarities with Terra, saying STRC also draws capital inflows with high yields and has a capital-inflow-based feedback structure in which that capital supports the price of the underlying asset.

But there are also clear structural differences. STRC is not an algorithm-based stablecoin but a corporate-issued preferred share. The product is based on an asset structure collateralised by bitcoin, and there is no protocol-level mechanism to increase token supply without limit.

The preferred share is based on bitcoin holdings of about 730,000 BTC. Because it is not a system where supply can surge explosively due to an automatic issuance structure like Terra, some say the likelihood of an immediate collapse in the same way is low.

That does not mean it is risk-free. Analysts stress that STRC's dividend is not a guaranteed fixed return and depends heavily on the company's financial condition and bitcoin prices.

The dividend is declared monthly by the company's board and can be reduced or suspended at any time. The product is a perpetual preferred share with no maturity date, and it has no safeguards such as a price floor or deposit protection. In the capital structure, STRC ranks behind corporate bonds or other preferred shares. The company also has a structure that allows it to issue additional STRC without limit through public offerings without shareholder approval.

The company recently sold about 3.7 million STRC shares to raise about $370 million, and the funds were used for additional bitcoin purchases. That approach could work positively if bitcoin prices rise, but some point out it could increase financial burdens if prices fall.

The average purchase price of the company's bitcoin holdings is known to be about $75,860. If bitcoin enters a prolonged decline, collateral value could shrink while dividend burdens remain in place.

STRC supporters, by contrast, see the product as a new financial structure. Some investors argue STRC creates a structure that absorbs demand for bonds and converts it into bitcoin, and could form a new bitcoin-based credit market over the long term. They see STRC as a new financing method that can offer higher yields than existing corporate bonds while reducing maturity or refinancing risks.

The core market debate is focused on whether STRC is a risky financial product with a collapse structure like Terra, or a new capital market model based on bitcoin. Experts said STRC investors should understand it not as a fixed-income bond but as a high-risk return product linked to bitcoin prices.