Digital credit market hit by huge selloff as Strive CEO blames leverage liquidations
CoinDesk 2026-06-19 09:19:28
Context: The digital credit market experienced a significant selloff, with Strive Asset Management's preferred equity STRC and SATA dropping sharply before rebounding. According to Strive CEO Matt Cole, the decline was caused by leverage-driven liquidations rather than a weakening of issuers' credit quality. This event occurred on Thursday, with Cole describing it as "the most difficult day in the history of Digital Credit."
Key Facts
- The digital credit market suffered a sharp selloff, with STRC falling as low as $82.50 and SATA dropping below $93 before both rebounded to $89 and $97, respectively.
- Matt Cole attributed the decline to a "leverage liquidation event" caused by margin calls and forced selling from leveraged investors, rather than a deterioration in underlying credit quality.
- Cole compared the episode to historical hedge fund blowups involving leveraged U.S. Treasury positions, noting that Treasury securities themselves remained strong credits despite periods of market stress.
- The sharp rebound from intraday lows suggests buyers stepped in aggressively as prices declined, with Cole pointing to strong buying interest as evidence of continued demand for digital credit assets.
- Cole stated that Strive's "dividend reserves remain intact" and the firm's underlying credit profile remains largely unchanged, adding that "a liquidation event and a credit event are not the same thing."