Digital Credit, explained — by people who don't issue it
The term has had a few meanings; the one that matters now is specific: exchange-listed preferred stock issued by companies that hold large Bitcoin treasuries. A firm like Strategy (MSTR) or Strive (ASST) sits on billions in BTC and issues a preferred share paying a fixed or variable cash dividend — turning a volatile asset into income. You buy it on Nasdaq like any stock; it pays monthly or quarterly.
Explainer refreshed May 25, 2026. Every figure below reads live from our source-verified data.
A Bitcoin treasury is an idle, volatile balance sheet. Issuing preferreds lets the company raise capital against that treasury without selling the BTC — and lets income-seekers get Bitcoin-linked yield without holding Bitcoin. It sits between owning BTC (all upside, all volatility, no income) and holding dollars (neither) — a middle layer that trades upside for a coupon.
You are not buying Bitcoin, and you have no claim on the company's Bitcoin. You're buying a preferred-equity claim on the issuer — a corporate-credit instrument whose safety depends on the company staying solvent and choosing to pay. The BTC treasury backs it only indirectly. If you want Bitcoin, buy Bitcoin. This is an income product with Bitcoin-shaped risk — not Bitcoin.
The listed Digital Credit instruments we track today, read live from our data. Structure, yield, score, and size update from the source-verified record — they can't drift from what we publish elsewhere.
| Instrument | Structure | Current yield | Pledge score | Market cap |
|---|---|---|---|---|
| STRFStrategy STRF | Senior perpetual preferred stock | 9.85% | 7.53 | $1.3B |
| STRCStrategy STRC | Variable-rate perpetual preferred stock | 11.58% | 7.67 | $10.4B |
| STRKStrategy STRK | Convertible perpetual preferred stock | 10.84% | 7.14 | $1.0B |
| STRDStrategy STRD | Long-duration high-yield preferred stock | 13.59% | 7.14 | $1.0B |
| STREStrategy STRE | Euro-denominated perpetual preferred stock | 12.50% | 6.74 | $620.0M |
| SATAStrive SATA | Variable-rate perpetual preferred stock | 13.00% | 7.00 | $496.0M |
STRFSTRCSTRKSTRDSTRE
SATAYield = current effective yield from each issuer's public dashboard; score = Pledge's 8-factor result. Figures are a snapshot, not live quotes or a recommendation. Open any row for the full source-verified review.
Four axes decide safety. We use STRC — the one instrument we've verified end-to-end against its SEC filings — as the worked example, and note Strive's SATA where its terms are confirmed. For every other instrument, check its own review: these structural terms vary by issue and series, and we don't assert what we haven't individually sourced.
Rate — fixed vs. variable
Some preferreds pay a fixed coupon; others are variable or set at the issuer's discretion (often with a floor). STRC is a variable-rate preferred: per its Certificate of Designation, the rate is set monthly at Strategy's sole discretion, floored at Monthly SOFR. Strive's SATA is also variable-rate. The structure column in the table above reflects each issue's type; confirm the exact reset mechanics on its review page.
Cumulative or not
If a dividend is missed, does it accrue and have to be paid later (safer), or is it simply gone? STRC is cumulative — per its Certificate of Designation, missed payments become “Compounded Dividends” that accrue monthly until paid, with a dividend stopper that blocks distributions to common or junior series until preferred arrears are cleared. By contrast, a non-cumulative preferred (e.g. STRD's terms) means a skipped dividend is not made up. This is one of the sharpest dividing lines — check it per instrument.
Seniority
Where you sit in the waterfall if things break. Within Strategy's own preferred stack, the verified order is STRF (most senior) → STRC → then STRE / STRK / STRD; all of them sit junior to Strategy's debt. Seniority is relative to one issuer's capital structure — it does not rank one company's preferred against another's.
Coverage
How many years of dividends the issuer's BTC could fund — the cushion. For Strategy, BTC at cost covers the full preferred stack roughly 7.1×, and the preferred-plus-debt stack roughly 4.1× (verified against its 10-K / 10-Q after the May 2026 debt paydown). Coverage is issuer-level, not per-series, and each issuer is different — Strive's cushion is its own and must be read on SATA's page.
Similar (issuer credit + coupon), but backed by one volatile asset with a roughly year-long track record.
No peg, no redemption promise — the value is the yield, not stability.
An exchange-listed, regulated security, not a smart-contract position.
- It’s issuer credit, not collateral — there is no lien on the BTC.
- The history is short — “no missed dividend yet” ≠ safe.
- Variable rates can be cut.
- The tax surprise: many of these distributions are return of capital, not qualified dividends — often worse than the headline yield implies (STRC and SATA both flag return-of-capital treatment; verify per instrument).
- The whole category rises and falls with one asset and a few issuers.
The most thorough guides to digital credit today are written by the companies that issue these instruments. They're good — and they're not neutral. We don't issue any of them. We score every one against a single published methodology, take $0 from the issuers, and link the primary source on every claim.