PANews, June 23 – According to CoinDesk, Jeff Walton, Chief Risk Officer at Strive, stated that the digital credit products (STRC and SATA) linked to the Strategy Bitcoin ecosystem have partially rebounded after a significant sell-off last week. The volatility was attributed to leveraged liquidations and heavy selling pressure, rather than a deterioration in underlying credit quality. Walton noted that trading data shows holders selling the related instruments triggered liquidations in traditional financial markets. The event did not originate from DeFi protocols but represents normal volatility in the maturation process of a new asset class. In terms of liquidity, STRC’s trading volume on Thursday was approximately $950 million, and SATA’s was about $150 million, far exceeding the roughly $77 million for BlackRock’s Preferred Securities ETF (PFF) over the same period, demonstrating the market’s strong capacity to absorb large trading volumes, which is crucial for attracting institutional investors.
Walton believes the opportunity in the digital credit market far exceeds current perceptions and could potentially cover the approximately $300 trillion credit market. He emphasized that STRC and SATA are credit instruments, not stablecoins. Strategy’s current leverage ratio is about 10%, significantly better than the roughly 130% level during the 2022 bear market, and prices are expected to return to the $100 target level. The recent volatility will not undermine the product’s long-term thesis.
