Strive CEO says STRC and SATA swings were driven by leveraged liquidation, not credit deterioration

According to Huo Xing Cai Jing, Strive CEO Matt Cole said in a June 19 post that it was the most difficult day in the history of digital credit, as STRC and SATA saw sharp intraday volatility. STRC fell to an intraday low of $82.50 before rebounding strongly. SATA dropped from near par to just above $90, then recovered. Cole said the moves reflected a leveraged liquidation event rather than weakening underlying credit quality. He explained that when investors find assets with high yields, relatively low volatility and solid credit fundamentals, they often add borrowing and leverage to boost returns. When market conditions turn, forced selling can set off a chain of price declines, margin calls and further liquidations, pushing selloffs away from fundamentals and making them driven by balance-sheet constraints. Cole said issuer credit quality remains sound. Strive's dividend reserve is intact, the company is not under pressure, and it retains the capacity to meet its obligations while continuing to execute its strategy. He also noted that meaningful buying interest appeared near the intraday lows in both STRC and SATA, fueling quick rebounds and suggesting real demand at lower price levels. Cole emphasized that a liquidation event is not the same as a credit event. He added that the day's volatility has not reduced his confidence in the long-term opportunity in digital credit, arguing the sector is creating a new class of financial instruments and is likely to go through growth pains similar to those seen in large fixed-income markets before they mature.