Bitcoin is getting too expensive, but I would like to invest in financial instruments based on Bitcoin but giving high yields like over 10 percent. Possible?

A deep dive into Bitcoin-backed preferred stocks by Strategy Inc. Discover how these high-yield instruments combine income, leverage, and crypto exposure

Team PGurus

November 5, 2025

High-yield Bitcoin-backed preferred stocks: How STRK, STRF, and STRD deliver income and risk

Analysis of High-Yield Bitcoin-Backed Preferred Stock (STRK, STRF, STRD)

Are there options for investors out there to invest on instruments based on the Bitcoin, that would give them high yields without the need for plunking over $100K per bitcoin? Here is one such option, although there maybe more…

The instruments you listed (STRK, STRF, STRD) are preferred stocks issued by Strategy Inc., which has adopted a strategy of accumulating Bitcoin (BTC) as its primary treasury asset. These stocks are designed to provide investors with leveraged exposure to Bitcoin’s performance alongside fixed or variable income yields (often 8-10%+).

1. What Are These Instruments?

The rise of Bitcoin-based preferred stock: balancing opportunity with volatility

Key Takeaway: These instruments sit above the common stock (MSTR) in the company’s capital structure, meaning they have a preferred claim on the company’s residual assets in the event of liquidation, but they are subordinate to any corporate debt.

2. Reliability and Risk Factors

The reliability of receiving your high yield depends entirely on the financial health and solvency of Strategy Inc., which is fundamentally tied to the price of Bitcoin.

A. The Primary Risk: Bitcoin Price Exposure (Credit Risk)

Reliance on Bitcoin: Strategy Inc.’s primary business strategy is accumulating BTC. The value of its assets, its ability to service debt, and ultimately, its ability to pay dividends on preferred stock are all heavily reliant on the price performance of Bitcoin.
Leverage Amplifies Risk: The company uses leverage (debt and convertible securities) to fund its BTC purchases. While this amplifies potential upside when Bitcoin rises (“Bitcoin Yield”), it significantly amplifies risk if Bitcoin’s price drops substantially. A deep, prolonged crash in the BTC price could put the company under financial stress.
Not Collateralized: Crucially, these preferred stocks are not directly collateralized by the company’s Bitcoin holdings. They only have a preferred claim on the residual assets of the company after all senior obligations (like debt) are met.

B. Dividend Risk

Non-Guaranteed Payments: Dividends on preferred stock, even at 10%+, are not guaranteed. They are paid when, as, and if declared by the company’s Board of Directors and only out of funds legally available for payment.
Cumulative vs. Non-Cumulative: This is a vital difference between the series:

STRF (Cumulative): If the company misses a dividend payment, the unpaid amount accumulates and must be paid to STRF holders before any dividends can be paid to STRK, STRD, or common stock (MSTR) holders. This offers a higher degree of safety.
STRD (Non-Cumulative): If the company misses a dividend payment, that payment is generally forfeited forever. This makes STRD the higher-risk instrument among the preferred stocks, despite its comparable fixed yield, because the company has less pressure to pay it back if it runs into trouble.
STRK (Cumulative): Similar to STRF, missed payments accrue.

C. Liquidity and Call Risk

Liquidity: While these are listed on Nasdaq (making them easy to buy and sell), they are less liquid than common stock (MSTR).
Call Risk: Strategy Inc. has the right, at its election, to redeem (call) these shares back for cash at a specified price (typically the $100 stated amount) plus any accrued dividends. If interest rates fall or the company’s financial position improves, they may call the stock, forcing you to reinvest your capital potentially at a lower rate of return.

3. Conclusion on Reliability

These are high-yield instruments but they come with a high level of risk appropriate for speculative investors.

High Yield = High Risk: A 10%+ yield on a US-listed security backed by a highly volatile asset (Bitcoin) is a premium for taking on substantial credit risk.
Reliability Assessment: The reliability of these instruments is best judged by two factors:

The long-term belief in Bitcoin’s appreciation (as this keeps the company solvent).
The specific seniority of the preferred stock: STRF offers the best protection (cumulative dividend, higher seniority), while STRD offers the highest risk (non-cumulative dividend, lowest seniority among preferreds) for the same 10% yield.

These instruments are generally considered a way to gain leveraged and yield-focused exposure to Bitcoin for institutional and sophisticated investors, but they carry significant risks of capital loss and dividend suspension if the Bitcoin market enters a sustained decline.

For all the latest updates, download PGurus App.

Author
Recent Posts

Team PGurus

We are a team of focused individuals with expertise in at least one of the following fields viz. Journalism, Technology, Economics, Politics, Sports & Business. We are factual, accurate and unbiased.