Digital Credit

Digital Credit is an asset class of income-generating securities backed by bitcoin. Issuers hold bitcoin as their primary reserve asset and issue preferred equity instruments against that collateral, creating structured products that offer investors yield, relative price stability, and potential growth opportunity. The capital raised is deployed to grow the issuer's bitcoin reserves further.

Distribution obligations are denominated in fiat currency, which depreciates over time, while the underlying collateral of bitcoin has historically appreciated. Dividend rates are set well below bitcoin's historic compound annual growth rate, meaning the issuer's collateral is designed to outgrow its obligations over time. Stability and yield are maintained through adjustable dividend rates, at-the-market equity issuances, and seniority provisions within the capital stack, with different instruments calibrated to meet different investor risk and income profiles.

A key innovation of Digital Credit is that it allows bitcoin treasury companies to raise capital and grow Bitcoin Per Share even when mNAV is at or below 1.0x, a window when common equity issuances would be destructive to existing shareholders. By offering yield-bearing instruments with seniority over common equity, issuers can access capital from investors who would not buy the common stock, meaningfully expanding the funding toolkit.

Digital Credit holders are preferred equity investors in a company that holds bitcoin, not bitcoin holders themselves. The most prominent instruments today include Strategy's STRC, STRF, STRD, and STRK, and Strive's SATA, each sitting at a different point in the capital stack with its own trade-offs across yield, volatility, and seniority. Track live data on the Digital Credit Dashboard or explore deeper analytics on the Data Playground.