Bitcoin's price remains under pressure, with market analysts suggesting the current decline is influenced not only by heightened expectations for a Federal Reserve rate hike but also by growing concerns over the financing model of the largest corporate Bitcoin holder, Strategy (MSTR.US). Investors are increasingly questioning the company's ability to sustain its Bitcoin acquisition strategy.

As of Thursday, Bitcoin briefly fell by 3.4% to around $62,184. Since reaching a record high in October 2024, Bitcoin has declined by nearly 50%. Two weeks ago, it fell below the $60,000 threshold for the first time since late 2024. Recent market focus has centered on Strategy's preferred share product, Stretch Preferred Shares (STRC.US), which it uses to finance Bitcoin purchases.

With the price of STRC consistently trading below its $100 face value, the pressure on Strategy's model of issuing shares to fund Bitcoin acquisitions is intensifying. The mechanism involves Strategy issuing preferred shares at a $100 face value per share, using the raised capital to purchase more Bitcoin, while investors receive an annual dividend in the double-digit percentage range. However, since its ex-dividend date on May 15th, STRC's price has failed to recover to its face value level.

As the shares continue to trade at a discount, the company's effective financing cost rises, equating to raising capital at a higher yield. On Thursday, STRC's price fell below $83, hitting a new low since its listing. The market's concern is that if STRC remains significantly below face value, Strategy may struggle to continue raising funds through this method to buy Bitcoin, potentially challenging its long-term "buy and hold" strategy.

Joshua Lim, Co-Head of Global Markets at FalconX, noted: "Everyone is watching the STRC price right now, as it has become a key barometer for market pressure on Strategy. The market is testing whether the company will persist with buying Bitcoin or choose to sell some holdings to bolster cash reserves and maintain preferred share dividends."

Market worries were further amplified earlier this month when Strategy's founder and chairman, Michael Saylor, sold a small amount of Bitcoin. Saylor has long been regarded as one of the staunchest proponents of the "never sell Bitcoin" philosophy. His recent minor divestment was interpreted by some investors as a potential signal of a shift, sparking speculation about Strategy's financial health.

Concurrently, the Federal Reserve's policy outlook is also exerting pressure on the cryptocurrency market. This week, following the first policy meeting, Federal Reserve Chairman Kevin Warsh delivered hawkish signals, with several officials suggesting the possibility of further rate hikes before year-end. Expectations for sustained or even higher interest rates have rapidly increased, weighing on risk assets broadly.

Joshua Lim added: "Beyond the issues with Strategy, there is concern about how rising rates will impact Bitcoin and other risk assets, creating a rather challenging market environment."

Cryptocurrency trading firm QCP Capital indicated that the market's weakness partly stems from investor fears that Strategy may need to sell more Bitcoin in the future to cover its preferred share dividends. This concern has been exacerbated following the company's recent $1.5 billion repurchase of convertible bonds maturing in 2029.

Jeff Dorman, Chief Investment Officer at Arca, believes Strategy may ultimately have to take action to restore market confidence. He stated the company might need to sell a "significant" amount of Bitcoin or common stock to support STRC's price near its face value, or the market will continue to worry about the uncertainty surrounding its capital structure. "Otherwise, investors will continue to see its entire capital structure under pressure due to this uncertainty."

Weighed down by these concerns, Strategy's stock price fell 3.46% on Thursday, bringing its cumulative decline since Monday's close to approximately 14%. Over the past year, the company's stock has fallen nearly 70%. Amid hawkish Fed policy expectations, rising U.S. Treasury yields, and market skepticism toward Strategy's financing model, Bitcoin faces significant near-term pressure. Future market focus will be on whether Strategy adjusts its financing and Bitcoin acquisition strategy and whether Bitcoin can hold the critical psychological support level of $60,000.