Strive Says Strategy Bitcoin-Backed Digital Credit Selloff Was Liquidation, Not Credit Crisis

Strive said a sharp selloff in digital credit products tied to Strategy's bitcoin-backed ecosystem was a liquidation event, not a credit crisis, with STRC falling as low as $82.53 on Thursday before rebounding to roughly $90.50 and SATA dropping into the low $90 range before recovering to about $98.59.

“Strive says digital credit selloff was a liquidation event, not a credit crisis A sharp selloff in digital credit products exposed growing pains in a young market, a Strive executive argues the underlying credit fundamentals remain intact”

@coindesk

Strive Chief Risk Officer Jeff Walton attributed the move to leverage liquidations and heavy selling pressure rather than deterioration in the underlying credit quality, and he said trading data suggests holders sold the instruments, triggering liquidations elsewhere in traditional financial markets.

@coindesk

Walton said the event did not appear to originate from DeFi protocols, and he characterized the volatility as part of the maturation process for a new asset class.

Strive CEO Matt Cole previously described the episode as a "leverage liquidation event, not a credit failure," and Walton argued the market's ability to absorb large trading volumes is a positive signal.

Walton said STRC traded roughly $950 million in volume on Thursday and SATA traded approximately $150 million in volume the same day, contrasting that with BlackRock's preferred securities ETF, PFF, which he said traded about $77 million in volume.

Anchorage Digital, a federally chartered crypto bank, said on Monday it is rolling out infrastructure that allows banks to issue tokenized deposits, creating a blockchain-based representation of customer deposits while keeping the underlying funds within the bank's traditional deposit accounts.

Anchorage Digital CEO Nathan McCauley said in an interview with CoinDesk, "Many of the banks that we're starting to work with are thinking about tokenized deposits, and how do we start to do [them]," as the platform provides blockchain infrastructure, wallet management and smart contract technology.

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The bank said its platform is designed as a parallel layer that sits alongside existing banking infrastructure rather than requiring institutions to migrate to entirely new systems, a process it said can take years and carry significant operational risks.

CoinDesk reported that America's biggest banks, including JPMorgan, Citi and Bank of America, plan to build a shared, tokenized deposit network by the first half of 2027.

The CoinDesk article also framed a debate over whether stablecoins or tokenized deposits will become the preferred way to move money on blockchain rails, noting that stablecoins such as Circle's USDC and Tether's USDT are typically issued by private companies and backed by U.S. Treasuries in reserves.

In May, CoinDesk said combined exchange volumes fell 3.45% to $4.41T, the lowest since September 2024, while RWA perpetual futures volumes rose 10.4% against the trend, hitting a new all-time high.

“Federally chartered crypto bank Anchorage Digital is rolling out infrastructure that allows banks to issue tokenized deposits, joining a growing effort by financial institutions to bring traditional bank money onto blockchain networks”

CoinDesk

Strive's Jeff Walton argued that deep liquidity is critical for attracting institutional investors and supporting long-term adoption, and he said investors appeared to rotate between SATA and STRC as yields converged.

Walton emphasized that SATA and STRC are credit instruments, not stablecoins, and he said Strategy currently carries roughly 10% leverage compared with approximately 130% leverage during the prior cycle.

CoinDesk also reported that Anchorage's tokenized deposit platform is intended to help banks offer round-the-clock payments and settlement services using blockchain technology without replacing their existing core banking systems.

Taken together, the sources describe a crypto market where digital credit volatility is being interpreted through leverage liquidations and liquidity capacity, while tokenized deposits are positioned as a way to bring traditional bank money onto blockchain rails without migrating away from existing systems.