Strive CEO Matt Cole Says STRC and SATA Sell-Off Was Leverage Liquidation, Not Credit Deterioration

Strive CEO Matt Cole said a sharp intraday drop and rebound in STRC and SATA reflected a leverage-driven liquidation event rather than weakening underlying credit quality. According to ChainCatcher, Cole wrote that STRC fell to an intraday low of $82.5 before rebounding, while SATA dropped from around par to the low $90s and then recovered, leaving many investors facing a difficult trading day. Cole said investors often borrow and add leverage when they see assets offering higher yields with relatively low volatility and strong credit characteristics. He said that when markets move against leveraged positions, forced selling can trigger a cycle of price declines, margin calls, and additional selling that becomes driven by balance-sheet constraints rather than fundamentals. He added that the issuers’ credit quality remains solid, Strive’s dividend reserves are intact, and the company is not under pressure, retaining the ability to meet obligations and continue executing its strategy. Cole also said both STRC and SATA saw notable buying interest near their intraday lows and recovered quickly, which he described as evidence of real demand at lower price levels. He said the day’s volatility did not change his confidence in the long-term opportunity in digital credit and argued that the sector is developing a new class of financial instruments that may experience growing pains similar to those seen before large fixed-income markets mature.