In 2025, Bitcoin’s foremost booster pitched financial alchemy. At a conference in Prague, Michael Saylor, the executive chairman of the Bitcoin hoarder Strategy, touted his company’s newest stock offering. “I give you the upside, you have no downside, and I pay you a dividend while you wait to get rich,” he said.

Saylor was extolling a perpetual preferred stock issued by Strategy that trades under the ticker STRC and is nicknamed “Stretch.” The instrument lies somewhere between stock and debt. One share of STRC is designed to trade at $100, and holders receive biweekly payouts of about 11.5% in dividends. Strategy uses the money raised from selling the stock to finance new buys of Bitcoin or cover interest payouts to its creditors.

The asset is an exotic financial offering—one Saylor said he designed with AI. While STRC doesn’t give holders ownership interest in Strategy, it is correlated with the success of Strategy’s business. The Bitcoin hoarder can only pay the dividends if it has cash, which it can only raise if lenders continue to give the firm money, which they will only do if they believe Strategy will pay them back.

The Strategy chairman said STRC had “money market–like stability,” but almost a year after its launch, that comparison appears to be… stretching it. The preferred stock is now trading at $74 as traders are likely nervous that the Bitcoin hoarder may not be able to pay out the dividends. 

“Is [STRC] not inevitably going to collapse?” asked Tarun Chitra, cofounder of the crypto risk company Gauntlet, on the crypto podcast The Chopping Block. 

The success or failure of Strategy will have a significant impact on the crypto industry. Founded as a data software company, Strategy has morphed into one of the biggest Bitcoin holders in the world, with more than $50 billion in Bitcoin on its balance sheet. And the firm has already seen its stock plummet after it sold Bitcoin in early June.

“The main question is whether this capital stack bends or breaks,” said David Lawant, head of research at the crypto custodian Anchorage Digital, referring to Strategy. “We’re definitely in a test period.”

It’s also a period when holders of STRC may feel betrayed by Saylor’s promise that his preferred stock is stable. In fact, in March, the Strategy chairman posted on X a commercial that depicted a woman bragging about how she put her savings into STRC. “You weren’t meant to live an uncomfortable life,” wrote Saylor above the video.

Three months later, Strategy’s chairman appears to be one who’s uncomfortable as he tries to assuage market jitters. “Volatility tests every capital structure,” he wrote on Thursday. But, despite skepticism from investors, Lawant, the head of research at Anchorage Digital, believes the Bitcoin behemoth can survive the market rebellion: “I think they will weather the storm.”

Kalshi and Polymarket and cashing in on the World Cup, generating at least $5.4 billion in betting volume related to the soccer tournament. (Fortune)

The crypto exchange Kraken is looking to invest in the lending protocol Aave. The deal would involve 250,000 AAVE tokens and a 15% stake in Aave Group. (CoinDesk)

The Hong Kong-based crypto exchange CoinEx has processed $3.84 billion for Iranian entities, according to analysis from TRM Labs. (WSJ)

The prediction market Kalshi is raising at a $40 billion valuation, just months after the hot startup raised at a $22 billion valuation. (FT)

A Cantor Fitzgerald SPAC is asking investors to put in less money than they initially promised in a deal to bring a Bitcoin digital asset treasury public. (Bloomberg)

Mark Zuckerberg wants in on prediction markets. The Meta CEO directed staff to create a betting app called Arena and has sought to work with Kalshi and Polymarket.

OpenAI inadvertently reminded Crypto Twitter of the industry’s traumatic past. 

Ben Weiss is a crypto reporter at Fortune.