Oil Shock Tests the Preferred Stockholders Behind Bitcoin’s Selloff

Bitcoin fell under $65,000 on Thursday after Brent crude spiked to $101.09 a barrel, a nearly 8% jump in 24 hours that dragged Coinbase, Strategy, Circle, Bitmine and Robinhood shares down with it, CoinGape reported. The European Central Bank had held its key rate steady in Frankfurt just hours earlier, then flagged a possible September hike. Fresh U.S. jobless claims data showed the labor market still holding up, giving traders one more reason to bet the Federal Reserve stays restrictive too.

The sharper bruise sits somewhere the ticker tape does not show. Strategy and Bitmine both fund fixed, double digit payouts to preferred stockholders out of cash reserves that a barrel of crude just made more expensive to refill.

Oil’s Jump to $101 a Barrel Drags Five Crypto Stocks Lower

Brent futures traded at $101.09 during Thursday’s session, up close to 8% on the day, while West Texas Intermediate crude rose about 7% to $92.77, according to CoinGape’s report. The jump tracks military tension between the United States and Iran, now stretching into its fifth month. Bitcoin slipped under $65,000 and ether lost around 3% on the day.

Five crypto linked stocks closed lower, tracking the broader risk off mood across equities.

Coinbase Global (COIN), the largest U.S. crypto exchange, led the common stock damage in dollar terms. Circle Internet Group (CRCL), the issuer of the USDC stablecoin, fell nearly 5%. Robinhood Markets (HOOD) slid too, a sign the pullback reached even retail favored brokerages. Cathie Wood’s ARK Invest has leaned into moments like this before, adding to its Coinbase and Circle positions on an earlier drop.

The Preferred Stockholders Riding Along for 12 Percent

Strategy’s model is simple on paper. Raise money through stock and debt sales, then buy bitcoin and hold it. Michael Saylor, Strategy’s executive chairman, has run that playbook since 2020. But a second, quieter arm of the business has grown alongside it: a stack of preferred shares that pay fixed cash yields regardless of where bitcoin trades.

• STRC (Stretch) – a variable rate perpetual preferred that Strategy just raised to a 12% annual dividend rate for periods starting July 1, according to a filing with the Securities and Exchange Commission. It is designed to trade near its $100 par value.
• STRF (Strife) – the senior most preferred in the family, paying a fixed 10% cumulative dividend every quarter.
• STRK (Strike) – another preferred layered into the same capital stack, alongside MSTR common stock.

Strategy raised the STRC dividend rate to 12% for the period, its latest increase since the security launched a year ago. That is the payout common stockholders never see on a headline chart, and it keeps rising even as MSTR shares slide.

Why Does Strategy’s Stock Fall Harder Than Bitcoin?

Strategy’s stock moves in exaggerated steps because of a metric called mNAV, the multiple of net asset value investors pay for a dollar of the company’s bitcoin through the stock. Above 1.0 the flywheel works: new shares sell at a premium, the proceeds buy more bitcoin than the stock gave up, and the model funds both fresh purchases and preferred dividends. Below 1.0, that math flips.

Strategy’s mNAV sits at roughly 1.05 times its bitcoin holdings as of this week, per live tracking data from mNAV.com, which puts the company’s 843,775 bitcoin at a net asset value near $55.9 billion. That is a thin cushion. The ratio briefly broke below 1.0 last month, according to Crowdfund Insider, at a point when bitcoin traded under $60,000, meaning the market valued the whole company at less than the coins sitting on its books.

Not everyone treats mNAV as a clean read on safety. Matthew Sigel, VanEck’s head of digital assets research, has cautioned that the figure “is not equivalent to ‘net asset value’ or ‘NAV’ or any similar metric in the traditional financial context,” excluding the preferred stock’s own liquidation claims from the picture entirely. In plain terms, the number most traders watch does not even subtract what Strategy already owes STRC, STRF and STRK holders first.

Where the Debate Actually Sits

• Skeptics – A Seeking Alpha review of the preferred terms in June warned the dividends are “not covered by recurring cash flows and rely on new issuance or Bitcoin sales.”
• Company defenders – Strategy and allied analysts, per Crowdfund Insider’s reporting, describe premium swings as a normal feature of the cycle rather than proof the model is broken.
• Independent researchers – VanEck’s Sigel treats mNAV as a supplemental figure only, not a substitute for reading the actual balance sheet.

A Reserve Growing in Dollars, Shrinking in Months

Strategy disclosed a run of defensive moves last week rather than its usual bitcoin shopping list. It sold common stock and, for the first time in years, prioritized cash over coins.

• $263.5 million raised through a common stock sale disclosed in a Monday filing
• $225 million of those proceeds added directly to Strategy’s cash reserve
• $3.225 billion total cash on hand, equal to 22 months of dividend and interest coverage
• 843,775 bitcoin held, unchanged for a second consecutive week

That reserve has actually grown since February, when a separate SEC filing put it at $2.25 billion, covering roughly two and a half years of obligations at the time. The dollar figure is bigger now. The runway, measured in months, is shorter, because the STRC dividend rate and the size of the preferred stack have both climbed faster than the cash backing them. Strategy has disclosed its first bitcoin sale since 2022 earlier this year, a break from the buy only posture that built its reputation, and paired it with two straight weeks of no new purchases.

Bitmine Built a Preferred Cushion of Its Own

Bitmine Immersion Technologies, chaired by Fundstrat co-founder Tom Lee, copied Strategy’s playbook for ether starting in 2025. Its unrealized losses on that stack grew from roughly $6 billion in February to about $8.9 billion by early June, as ether slid under $1,800. Lee has called the paper losses “a feature, not a bug” of the strategy, arguing Bitmine is built to track, and eventually beat, ether over a full cycle rather than trade in and out of it.

Bitmine now holds 5.78 million ether, about 4.8% of the coin’s circulating supply, according to the company’s most recent weekly shareholder disclosure. That scale is exactly why the drawdown runs into billions rather than millions.

Bitmine also carries its own version of the preferred stack: a Series A Preferred Stock trading on the New York Stock Exchange under the ticker BMNP, a fixed income claim sitting above the common shares that make the headlines. Its board expanded its buyback authorization to $4 billion, up from $1 billion, and the company used it last week to repurchase 5.5 million common shares at an average price of $15.6156, close to Thursday’s $16.40 close. Bitmine’s stock, now trading below its own treasury value, has lost roughly half its worth this year even after a small pre market bounce last week, a slide that has pushed ether teetering near a critical price mark for the whole treasury bet.

What Lagarde Actually Told Reporters in Frankfurt

The ECB’s Governing Council left its three key rates unchanged Thursday: the deposit facility at 2.25%, the main refinancing rate at 2.40% and the marginal lending facility at 2.65%, following June’s quarter point hike, its first increase since 2023. Eurozone inflation has eased to 2.8% from 3.2% in May, with core inflation at 2.4%.

Uncertainty remains high and the full inflationary impact of the energy shock has yet to play out.

Christine Lagarde, the ECB’s president, said that in the bank’s official post meeting statement in Frankfurt. She added that the Governing Council is “closely monitoring the intensity and duration of the shock,” language that markets read as an open door to September. Data tracked by Trading Economics put the odds of a September ECB hike near 70% as of Thursday. On the U.S. side, CoinGape’s report pegged the odds of a Fed hike by September at 56.5%, per the CME FedWatch Tool.

Two Meetings Now Carry the Risk

Thursday’s slide is not the first time Middle East tensions have hit crypto stocks this year. Bitcoin sank after a third round of U.S. strikes near the Strait of Hormuz, then again when Houthi attacks on tankers sent oil surging, and once more as bitcoin tried to hold $65,000 through a ninth straight night of strikes. Those episodes rattled bitcoin and XRP during earlier tanker attacks the same way Thursday’s headlines did.

What has changed is which companies have the least room left to absorb another one. Bitmine is defending billions in paper losses while still paying a preferred dividend on BMNP. Strategy is stockpiling cash instead of buying bitcoin for the first time since it started the playbook, while STRC, STRF and STRK holders keep collecting checks funded by a premium that has already dipped below parity once.

The Federal Reserve meets July 28 and 29. The ECB’s next scheduled decision, and its next set of economic projections, arrives September 10, the meeting Lagarde has already flagged as the likely trigger point for a second hike this year.

Frequently Asked Questions

Is Bitmine Still Buying Ether Despite the Losses?

Yes, at times. Bitmine added 126,971 ether, worth about $214 million, in one of its largest single purchases of the year even while sitting on billions in unrealized losses. More recently the company has leaned toward repurchasing its own shares rather than adding to the ether stack.

How Far Has Ether Fallen From Its 2025 Peak?

Ether has dropped more than 57% from its 2025 peak near $4,955, a decline that has hit institutional treasury strategies like Bitmine’s especially hard given how much ether they hold relative to their cash cushion.

What Did the ECB Signal Before Thursday’s Hold?

ECB officials struck a calmer tone at the Sintra forum in early July, signaling less urgency for a second rate move. That tone reversed by July 23 as renewed Strait of Hormuz strikes pushed oil back above $100 and put September squarely back on the table.

What Happens if Strategy’s Cash Reserve Runs Low?

The preferred stock terms let Strategy’s board cut the dividend rate down to a floor tied to SOFR, the Secured Overnight Financing Rate, rather than miss a payment outright, according to a Seeking Alpha review of the filing language. That gives management an escape valve, but it would still mark the first cut since the securities launched.

Disclaimer: This article covers crypto and equity market moves for informational purposes only and does not constitute investment advice. Prices, rates and reserve figures are accurate as of publication and can shift quickly, so check current data and consult a licensed financial adviser before trading.