Strive CEO: price drop of STRC and SATA was a liquidation event

Strive CEO Matt Cole describes the past trading day as the toughest in Digital Credit’s history. The STRC and SATA tokens dropped sharply but also recovered quickly afterwards. According to Cole, there is no reason to panic: what is happening is a leverage liquidation event, not a sign of worsening credit quality.

Sharp declines and rapid recovery

STRC fell to a low of $82.50 before the price bounced back sharply. SATA dropped from par to the low 90s and then also made a similar move upwards. Earlier, the STRC share had already fallen to a record low of $89, which is now further surpassed by the new drop to $82.50.

Cole says that around the daily lows there were actually significant numbers of buyers active. According to him, this indicates that market participants see the dip as a buying opportunity, not as a signal to sell. That picture fits his statement that the underlying credit profiles of the issuers remain strong.

Forced selling as the cause

What is causing the movement is forced selling by parties with too much leverage, Cole explains. Those sales lead to a cascade effect where prices quickly come under pressure. This kind of liquidation can cause large swings that are unrelated to the actual value or quality of the product.

Cole also indicates that Strive’s dividend reserves are intact and that the company itself is not under financial stress. The message is clear: the fundamentals are sound, the market is reacting to technical pressure and not to poor business results. Whether investors adopt that message will become clear in the coming period, but the initial reaction to the daily lows seems positive at least.