What Is Bitcoin Digital Credit?

The short answer: Bitcoin digital credit is perpetual preferred stock that bitcoin treasury companies sell to raise money to buy bitcoin. Investors get a high cash dividend. As of October 27, 2026, Strategy's STRC pays 12% a year on a $100 stated amount and Strive's SATA pays 13%. It is equity, not debt: it never matures, is not backed by specific bitcoin and dividends can be cut or paused.

Drawing on The Pomp Podcast, hosted by Anthony Pompliano (anthonypompliano.com), with Strive CEO Matt Cole (June 4, 2026) and Strategy CEO Phong Le (March 3, 2026). Figures from company filings as of October 26, 2026; prices as of October 27, 2026.

Bitcoin treasury companies have found a new way to raise money: selling preferred stock that pays a high, steady dividend. The industry calls it "digital credit." Strategy's version trades as STRC. Strive's trades as SATA. This week Strive disclosed its biggest bitcoin purchase yet, and Strategy shareholders vote on October 28 on paying daily dividends on its preferred stock. This piece explains how these securities work, where the yield comes from and what can go wrong. Figures are from company filings as of October 26, 2026, and prices are as of the afternoon of October 27.

Digital credit is the name bitcoin treasury companies use for perpetual preferred stock they issue to buy bitcoin. Investors get a fixed or variable cash dividend. The company uses the money to buy bitcoin and is betting bitcoin will grow faster than the dividend it pays.

Despite the name, it is not a loan. "It's a preferred equity instrument. It's not debt. It's not a money market. It's not money," Strive CEO Matt Cole told Pomp in June. Strategy CEO Phong Le made the same point in March: "It's really an equity instrument, meaning we don't have to pay it back ever because it's perpetual nature."

Preferred stock sits between bonds and common stock. Preferred holders get paid dividends before common shareholders, but after lenders. "Perpetual" means it never matures. The company never has to repay the original investment, though it can usually buy shares back or redeem them.

That's the key difference from a bond. A bondholder is owed their money back on a set date. A preferred holder is owed dividends only when the board declares them.

STRC is Strategy's Variable Rate Series A Perpetual Stretch Preferred Stock. It first issued on July 29, 2025 and trades on Nasdaq. It has a $100 stated amount and currently pays an annual dividend of 12%, or $12 a share, according to Strategy's October 25 investor briefing. It traded near $99.50 on the afternoon of October 27, an effective yield of about 12.06%.

The rate is variable. Strategy reviews it monthly, with the goal of keeping STRC trading near $100. Dividends are cumulative, meaning missed payments build up and are owed later. Strategy has also been buying back STRC: it repurchased about 2.07 million shares for $204.9 million in the week to October 25, according to its 8-K filing. It held a $4.83 billion "USD Reserve" meant to cover preferred dividends and debt interest.

Le explained the design in March. "If you want to match something like Bitcoin, which has long duration, high volatility, we need to provide to the market a short duration, low volatility product. That's what STRC is."

On October 28, Strategy holds a special meeting at which holders of its common stock vote on paying daily dividends on all four of its U.S.-listed preferred stocks: STRF, STRC, STRK and STRD. Dividends would accrue every calendar day and be paid the next business day. If the proposal passes, STRC's first daily dividend would have a record date of November 1, with the other three following in January, according to Strategy. If it fails, STRC keeps its twice-monthly schedule. The board has conditionally declared November dividends of $1.00 a share at the same 12% rate if the change is approved, CoinMarketCap reported. For background on the company, see What Is Strategy?

SATA is Strive's Variable Rate Series A Perpetual Preferred Stock. It also has a $100 stated amount and a variable rate, and it pays dividends every business day. Strive's board kept the rate at 13% for November and declared daily dividends of $0.0571 a share, according to an October 13 filing. That filing also made a $100 minimum sale price binding for all future SATA sales by Strive. Like STRC, SATA's dividends are cumulative, according to Strive. SATA traded near $98.60 on the afternoon of October 27, an effective yield of about 13.2%.

Cole said in June that daily dividends are meant to make the price steadier. "You're not trying to time a a dividend event, which should reduce and compress the volatility," he said.

Strive has a second preferred stock now too. In October it sold 7 million shares of SATS, a 15% perpetual preferred, at $90 a share for $630 million, Bitcoin Magazine reported. On October 26, Strive disclosed it bought 6,182 bitcoin from October 17 to 23 at an average of about $82,732, bringing its holdings to 43,000 bitcoin. It also set up a program to sell up to $1 billion more of SATS over time. See What Is Strive? for more.

From the company, not from bitcoin itself. Neither STRC nor SATA is backed by specific bitcoin. The companies pay dividends from cash reserves and from raising more capital, and hold bitcoin on the balance sheet.

Cole called it "a carry trade." The company pays roughly 12% to 13% to preferred holders and bets bitcoin will compound faster. "What we are making a investment bet on is that the average compounded annual growth rate of Bitcoin into the future will be better than that financing rate," he said. "Bitcoin is the hurdle rate." Cole said he expects bitcoin to compound at about 30% a year on average.

Cole said Strive planned for a repeat of the 2022 bear market, which he said would mean about a $40,000 bitcoin bottom. He said Strive has no debt and about 18 months of cash, STRC holdings and reserves. Strive still held 505,000 shares of STRC as of October 23, its filing shows.

Digital credit offers income far above money market funds, but the yield is high for a reason. You're relying on a bitcoin treasury company's balance sheet. There's no maturity date, no collateral and no insurance, and the dividend depends on the issuer's reserves and its ability to keep raising money. The structures are getting more protective, with cash reserves, buybacks, daily dividends and Strive's $100 issuance floor. Before buying, read the prospectus, check the current rate on the issuer's site and size the position as if the dividend could be cut.

It is perpetual preferred stock issued by bitcoin treasury companies such as Strategy and Strive to raise money to buy bitcoin. Holders receive a cash dividend, but it is equity, not debt.

As of October 2026, Strategy's STRC pays a variable annual dividend of 12%, or $12 a year per $100 stated amount. Strategy reviews the rate monthly.

Strive kept SATA's annual dividend rate at 13% for November 2026 and pays dividends every business day. SATA dividends are cumulative.

No. Strategy says STRC is not collateralized by its bitcoin holdings and only has a preferred claim on Strategy's residual assets. It ranks behind Strategy's debt and its STRF preferred stock.

Yes. The rates are variable and can be lowered, and boards can pause dividends. STRC and SATA dividends are cumulative, so missed payments are still owed.

The Pomp Podcast is hosted by Anthony Pompliano and covers the future of business, finance and technology. The show features Pomp's conversations with founders, investors and economists about bitcoin, markets, AI and the economy. Follow The Pomp Podcast on X.

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This article reflects the opinions of the guests and host as shared on The Pomp Podcast. It is guest opinion, not investment advice. Do your own research before making any investment decision.