Digital Credit Market Faces Major Test Amid Bitcoin Price Decline

June saw a significant test for the digital credit market, which funds corporate Bitcoin purchases through preferred shares. According to BitcoinTreasuries.net, public companies added close to 9,000 BTC in June, worth approximately $427 million at the month-end price of $58,398. This growth was largely driven by Michael Saylor's Strategy AC and Strive, which spent around $200 million each to buy Bitcoin.

The preferred shares model works by companies issuing shares that promise investors a fixed or variable dividend, selling them near a par value of $100, and then using the proceeds to buy Bitcoin. However, when STRC and SATA fell below their $100 par in June due to a decline in Bitcoin's price, leveraged holders got margin-called, leading to forced sales that pushed prices down.

The market reacted with caution, but demand for the preferred shares did not vanish. In fact, combined STRC and SATA trading topped $10 billion in June, a monthly record. The report also notes that while some investors were concerned about the price drop, many saw it as a temporary setback rather than a major problem.

Looking ahead, 77.8% of respondents expect the digital-credit supply to grow by the end of 2027, with nearly a fifth predicting it will clear $50 billion. As Strategy AC continues to buy and hold Bitcoin, its holdings now stand at 843,775 BTC at an average cost of around $75,651.