Strive CEO Matt Cole reported that a sharp sell‑off in the Digital Credit market on June 19 caused significant volatility, pushing STRC down to $82.50 and SATA into the low‑$90 price range.
Leverage‑Driven Decline
Matt Cole explained that forced liquidations, not a weakening of credit fundamentals, sparked the price plunge. Leveraged investors faced margin calls, which compelled them to sell additional positions and amplified the downward pressure. The cascade of sell orders reflected a leverage liquidation event rather than a deterioration in the underlying credit quality of the securities.
Investors had increasingly borrowed against STRC and SATA to chase higher yields, a practice that magnified risk when prices slipped. As margin calls kicked in, the market experienced a rapid acceleration of sales, dragging the Digital Credit assets lower despite solid issuer fundamentals.
Recovery and Market Outlook
After the initial shock, buyers reentered the market and absorbed the excess supply, allowing both STRC and SATA to recover modestly. Cole emphasized that Strive did not tap its dividend reserves during the episode, underscoring the company’s financial resilience. The episode mirrors previous leveraged Treasury trade failures, highlighting the importance of managing leverage in blockchain‑based crypto credit instruments.