Strategy co-founder and chairman Michael Saylor on Nov. 7, 2026, outlined the historical financial instruments that he said enabled digital credit and explained how Strategy combined them in its Stretch preferred shares. The framework matters to Strategy because it allows the company to use bitcoin as a corporate reserve asset and issue yield-bearing securities against that foundation.

“Digital credit took four centuries to make possible,” Saylor wrote. Bitcoin’s white paper was published in October 2008 and the network launched in January 2009, but Saylor said the corporate, exchange, regulatory and tax infrastructure needed for such instruments emerged over several centuries.

Ten foundations for digital credit

Saylor identified 10 developments that he said made digital credit possible:

Common stock: In 1602, the Dutch East India Company helped establish a model under which investors could transfer their stakes while the company continued using the capital it had raised.

Preferred stock: In 1836, Maryland financed the Baltimore & Ohio Railroad through an instrument offering priority dividends. The structure separated investors seeking maximum growth from those preferring regular payments.

Exchanges and ticker symbols: From the Buttonwood Agreement of 1792 to Nasdaq’s launch in 1971, markets developed infrastructure for trading securities and establishing their market value.

Securities and commodities regulation: U.S. laws enacted from 1933 to 1936, followed by expanded commodities regulation in 1974, helped distinguish a company’s assets from the financial claims it issues.

The Investment Company Act of 1940: The law set rules for companies investing in securities, including criteria for valuing their assets.

Return of capital: U.S. tax law beginning in 1921 established a mechanism through which certain distributions can reduce an investor’s tax basis instead of being recognized immediately as income.

Shelf registration: SEC Rule 415, introduced in 1982, allowed companies to preregister securities offerings and raise funds when market conditions were favorable.

At-the-market programs: ATM programs allow an issuer to sell new shares gradually on the open market at prevailing prices.

Share repurchases: Buybacks gave companies a way to reduce outstanding shares and the future obligations attached to them.

Bitcoin: The asset’s emergence after the publication of its white paper and the network’s launch allowed companies to hold it on their balance sheets and use it as the basis for financial products.

Saylor also noted that the U.S. Commodity Futures Trading Commission explicitly classified bitcoin as a commodity in 2015. In 2026, the Securities and Exchange Commission and the CFTC published an interpretation placing bitcoin among digital commodities that are not, in and of themselves, securities.

How Strategy structured Stretch

Strategy combined those mechanisms in Stretch, perpetual preferred stock trading on Nasdaq under the ticker STRC. Its initial offering closed in July 2025 and raised about $2.521 billion before expenses. The company said it used the net proceeds to buy 21,021 BTC.

Stretch pays a monthly dividend at a rate set by Strategy’s board. Its structure is intended to encourage trading near its $100 par value. STRC holders rank ahead of common shareholders but behind the company’s creditors.

Under the model described by Saylor, bitcoin serves as the reserve asset, preferred shares define investors’ claims and Nasdaq provides a secondary market. Shelf registration and ATM programs support additional fundraising, while share repurchases and reserves form part of the company’s liability-management tools.

Saylor also cited changes to Stretch’s terms that took effect on Nov. 1, 2026. The changes introduced calendar record dates for dividend entitlement and weekday payments that account for weekends and holidays.

“The innovation is the way those elements work together,” Saylor concluded.

River points to earlier bitcoin drawdowns

Separately, analytics platform River cited previous bitcoin declines in an Nov. 5, 2026, post. It said bitcoin lost 85% in 2014 after the collapse of Mt. Gox and China’s pressure on crypto exchanges, 84% in 2018 as the altcoin boom ended and regulation tightened, and 77% in 2022 during a crisis among overleveraged companies, including Celsius and FTX.

River said bitcoin fell 53% in 2026 amid major exchange hacks and growing concerns about artificial intelligence and quantum computing.

“Every bear market brings new fears but Bitcoin keeps moving forward,” River said.

Source: Incrypted