What Is Bitcoin Digital Credit? STRC and SATA Explained

's next big market may not involve owning BTC at all. It may involve financing the companies that hold it. Bitcoin digital credit barely existed two years ago. Dan Hillery of UXTO now estimates the market at roughly $16 billion and argues it could one day rival Bitcoin's own $1.5 trillion market capitalization.

The products at its center are preferred stocks, not Bitcoin-backed loans. Strategy's STRC pays a 12% annualized dividend in cash, twice a month, on a share with a $100 stated amount. Strive's SATA works on a similar model. But STRC is not collateralized by Strategy's bitcoin, and June exposed the cost: the share traded well below $100, and Strategy later sold bitcoin to help fund dividends.

Here is how STRC and SATA work, what broke in June, and what would have to change for a $16 billion market to grow anywhere near $1.5 trillion.

What Is Bitcoin Digital Credit and How Does It Work?

Bitcoin digital credit is a preferred security issued by a Bitcoin treasury company. It pays a fixed or variable dividend on a stated $100 value, and the issuer uses the money it raises to buy more Bitcoin.

Strategy, the world's largest institutional Bitcoin holder, runs the flagship example. Its