Digital Credit vs. Bitcoin ETFs

What is digital credit?

"Digital credit refers to exchange-listed perpetual preferred stock issued by companies that hold Bitcoin as a primary treasury asset. These yield-bearing instruments have indirect Bitcoin exposure via the issuer's balance sheet and trade in public capital markets."

Definition as published on True North Research's hub, retrieved July 28, 2026.

"Digital credit" is the category terminology used in the True North framework. The securities are legally issued as perpetual preferred stock under their respective offering documents, filed with the SEC.

Investors own preferred shares issued by a company; they do not directly own the company's Bitcoin and do not necessarily hold a lien on any specific Bitcoin.

The term "digital credit" has also been used to describe online lending, mobile credit, and blockchain-based loans. This page addresses the Bitcoin treasury capital-markets usage associated with securities such as STRC and SATA.

Key facts

Definition source

True North Research, The Definitive Guide to Digital Credit (definition retrieved July 28, 2026)

Legal form

Perpetual preferred stock under the applicable offering documents (evergreen)

Instruments in the category

Six exchange-listed series from two issuers — Strategy Inc. (STRK, STRF, STRD, STRC, STRE) and Strive, Inc. (SATA) — as of July 29, 2026

STRC stated rate

12.00% per annum (variable) for semi-monthly periods with record dates on or after July 1, 2026, declared June 28, 2026 — as of July 29, 2026

SATA stated rate

13.00% per annum (variable) for monthly periods commencing on or after April 15, 2026 — as of July 29, 2026

Stated amount (STRC and SATA)

$100.00 per share — per the offering documents, as of July 29, 2026

What holders own

Preferred shares of the issuing company — not Bitcoin, and not necessarily a lien on any specific Bitcoin (evergreen)

How does digital credit work?

A public company that holds Bitcoin in its treasury issues perpetual preferred shares on a stock exchange; investors buy those shares for their stated dividends, and the shares trade at market prices that can sit above or below the stated amount. The step-by-step flow:

1. A public company owns Bitcoin as part of its treasury.
2. The company issues perpetual preferred shares under an SEC-registered offering.
3. Investors purchase the preferred shares on an exchange, like any listed stock.
4. The shares may pay dividends according to their offering terms — when, as, and if declared by the board.
5. The security trades at a market price that may be above or below its stated amount or liquidation preference.
6. Investors bear issuer, market, liquidity, dividend, interest-rate, and Bitcoin-related risks.
7. Because the security is perpetual, it generally has no required maturity date — exiting means selling in the market.

Holding Bitcoin does not automatically fund the dividends: distributions depend on the issuer's overall finances, board declarations, and the terms of each series.

Where does digital credit sit in the capital stack?

Preferred equity sits between the issuer's debt and its common stock: it ranks junior to all of the issuer's indebtedness but ahead of common equity. That position shapes both its claim in a wind-down and its day-to-day risk.

• Preferred equity generally ranks ahead of common stock and behind the issuer's debt.
• Ranking can vary with the issuer's organizational structure and each series' offering terms — including ranking among preferred series of the same issuer.
• Seniority does not eliminate the possibility of loss.
• Holders generally have limited or no voting rights in the ordinary course.
• Dividends are subject to board declaration, legal restrictions on distributions, and the offering terms.
• The diagram does not portray Bitcoin as collateral: these series do not give holders a security interest in the issuer's Bitcoin.

How does digital credit differ from a spot Bitcoin ETF?

A spot Bitcoin ETF holds Bitcoin in a fund, and its share price tracks the value of that Bitcoin minus fees. Digital credit is preferred stock of an operating company: its price responds to dividend terms, issuer credit, and interest rates — Bitcoin affects it only through the issuer's balance sheet. Field by field:

Individual products differ; verify any specific security or fund against its own offering documents. Download this comparison table (CSV) — reusable with attribution; see Cite this page.

How does digital credit compare with other Bitcoin-related investments?

Digital credit occupies a specific niche: dividend-oriented, exchange-listed, and one step removed from Bitcoin itself. The contrasts below cover the main alternatives an income-focused Bitcoin investor is likely to weigh.

Direct Bitcoin

Owning Bitcoin directly is bearer ownership: you (or your custodian) hold the asset itself, with no issuer between you and it. There are no dividends, no board decisions, and no credit exposure to any company — and also no income. Digital credit inverts that trade: dividend potential in exchange for issuer risk, with no ownership of Bitcoin at all. See our comparison of ETF and direct ownership for the custody side.

Bitcoin treasury common stock

Common shares of a Bitcoin treasury company (such as MSTR or ASST themselves) carry greater upside and downside sensitivity to both Bitcoin and the issuer's prospects, usually with no stated dividend. Common ranks below preferred: preferred holders are paid their stated preferences ahead of common in a wind-down, and cumulative preferred dividends must generally be satisfied before common distributions.

Corporate bonds

Bonds are debt: they commonly carry contractual interest and a maturity date, and they rank above preferred stock in the capital structure. Preferred dividends, by contrast, are declared at the board's discretion, and perpetual preferred stock has no maturity. A digital-credit security is not a bond, even when its stated rate looks bond-adjacent.

Covered-call Bitcoin ETFs

Covered-call Bitcoin funds generate distributions by selling options on Bitcoin exposure rather than by preferred dividends, and the strategy can limit upside participation. The cash flows come from a derivatives strategy inside a fund — a different mechanism, with different risks, from an issuer's board declaring a dividend. See our premium income ETF guide and covered-call calculator.

Stablecoins

Stablecoins are designed to track a reference value (usually the dollar) and are structurally different from exchange-listed perpetual preferred securities: they are not equity, pay no board-declared dividends, and do not trade on stock exchanges.

Crypto lending and decentralized finance

Lending platforms and DeFi protocols reflect older or separate uses of the phrase "digital credit" — loans made in or against crypto assets. Those uses are outside this page's principal definition, which covers exchange-listed perpetual preferred stock of Bitcoin treasury companies.

STRC and SATA: instrument profiles

STRC and SATA are the two variable-rate series in the category. Terms vary materially among digital-credit securities — the two profiles below are not interchangeable, and neither profile is a recommendation. All fields are verified against the SEC filings linked in each profile.

Which securities make up the digital-credit category?

Six exchange-listed series from two issuers are trading as of July 29, 2026: five from Strategy Inc. and one from Strive, Inc. Ticker links go to each issuer's SEC EDGAR filing index, where the offering documents live.

Terms as of July 29, 2026, from the issuers' SEC filings. Per-instrument profiles for all six series are maintained on True North's markets pages.

How do dividends and current yield work on these securities?

Each series has a stated dividend rate applied to a stated amount (usually $100 per share), producing an annual dividend per share. Indicated current yield divides that annual dividend by what you actually pay — the market price — so yield moves inversely to price even when the dividend does not change.

• Stated rate — the per-annum percentage in the offering terms, applied to the stated amount. On variable-rate series it can be adjusted by the issuer.
• Stated amount / liquidation preference — the reference value the rate is computed on; not a price promise.
• Board declaration — dividends are paid only when, as, and if declared; a stated rate is not a payment guarantee.
• Cumulative vs. non-cumulative — cumulative series accrue missed dividends for later payment priority; non-cumulative series forfeit them.
• Why a high displayed yield can signal risk — a falling market price raises indicated current yield; the market may be pricing issuer, rate, or liquidity concerns.

Illustrative example (not any specific security): a preferred share paying $8.00 annually and trading at $100.00 has an indicated current yield of 8.0%. If its market price rises to $110.00 while the dividend is unchanged, indicated current yield falls to approximately 7.27%.

How do the risks differ from a Bitcoin ETF?

Dividends on these instruments are declared at the discretion of the issuer's board and are not guaranteed. Where a series is cumulative, unpaid dividends accrue and must be paid before certain other distributions — accrual is not a guarantee of payment. Stated rates on variable-rate series may be adjusted up or down by the issuer.

These securities are perpetual, carry no voting rights in the ordinary course, rank junior to all of the issuer's indebtedness, may be subject to issuer redemption features, and depend on the issuer's ability to service distributions from a balance sheet concentrated in a volatile asset.

A spot Bitcoin ETF carries Bitcoin price risk plus fund-level risks. Digital credit replaces most of that direct price exposure with issuer and structure risk. The categories that matter, described from the offering documents:

• Perpetual duration / no maturity. There is no date the stated amount comes back to you; exiting requires selling at the market price.
• Discretionary dividends and cumulative-accrual mechanics. Boards declare dividends when, as, and if; cumulative accrual creates payment priority, not payment certainty.
• Subordination to indebtedness. Every dollar of issuer debt ranks ahead of the preferred in a wind-down.
• Issuer redemption features. The issuer may have the right to redeem shares, which can cap upside or end an income stream on the issuer's schedule.
• Non-voting. Holders generally cannot vote in the ordinary course and have limited say in issuer decisions.
• Single-issuer credit dependence on a volatile treasury asset. A major Bitcoin decline can weaken the issuer's balance sheet, market perception, and financing flexibility — the credit behind the dividend is concentrated.
• ATM issuance and distribution-coverage dilution. Issuers may sell additional preferred shares through at-the-market programs; a growing distribution burden must be serviced from the same balance sheet.
• Secondary-market liquidity and bid-ask. Trading volume and spreads may be materially less favorable than large Bitcoin ETFs or common stocks.
• Premium/discount to stated amount. Market prices can sit well above or below $100; buying at a premium reduces effective yield and adds price risk.
• Interest-rate sensitivity. Higher market yields tend to reduce the market value of existing preferred shares.
• Terminology risk. The label "digital credit" may suggest debt-like protections the securities do not legally provide — they are preferred equity.

Tax treatment of preferred dividends and dispositions differs from spot Bitcoin ETFs and varies by investor and account type; it is not addressed on this page.

Investors should rely on the applicable prospectus and issuer filings rather than category labels when evaluating legal rights and risks.

Digital Credit Income & Current Yield Calculator

Estimate per-period income, indicated current yield, yield on cost, and premium/discount to stated amount for any preferred security using the values you choose. Enter either a stated rate and stated amount, or an annual dividend per share.

Formulas used by this calculator

Rounding: computations use unrounded values; displayed dollars and percentages are rounded to two decimals. Results assume no reinvestment or compounding. Computation is entirely client-side; inputs never leave your browser.

Frequently asked questions

Sources and methodology

Sources are used in this order of priority: (1) SEC filings and final prospectuses; (2) issuer investor-relations materials; (3) exchange information; (4) True North research and methodology; (5) BTCETFCalc calculations and original comparisons; (6) reputable independent financial reporting. Instrument terms are never taken solely from a secondary article when a primary filing is available; every changing figure on this page carries an as-of date, and each instrument profile links its primary documents.

• Strategy Inc. EDGAR filing index (424B5 and 8-K filings)
• Strive, Inc. EDGAR filing index (424B5 and 8-K filings)
• Nasdaq listing page for STRC and Nasdaq listing page for SATA
• iShares Bitcoin Trust ETF (IBIT) EDGAR filing index — for the spot-ETF side of the comparison
• True North's digital-credit glossary — category terminology reference
• True North's digital-credit dashboard — used as a cross-check for figures; never as the primary source

Figures were verified against the linked SEC filings on July 29, 2026 and cross-checked against True North's dashboard the same day. Machine-readable provenance for every figure is maintained in the site's editorial records.

Cite this page

Update log

• Updated July 29, 2026: Disclosure wording revised to refer to the site's operator; article attribution changed to BTCETFCalc.com as publisher.
• Updated July 29, 2026: Initial publication.

Corrections policy: material factual errors are corrected within two business days of discovery and noted here. The evergreen definition does not change merely because prices, rates, or market size change.