Across two record-breaking days this week, Strategy’s 11.5% dividend-paying preferred stock, STRC, likely raised more than $1.2 billion and could even have raised as much as $2.7 billion.

Whatever the figure, it was enough to trigger popular crypto YouTuber Coffeezilla to take the STRC controversy mainstream.

The volatile, quasi-pegged STRC is the subject of intense debate among bitcoin (BTC) investors on social media.

It usually pays monthly dividends and trades near $100, yet has fluctuated more than 9% across its brief lifespan and can suspend dividend payments at the discretion of its board of directors.

Depending on the estimation methodology ahead of Monday’s formal SEC filing, Strategy’s STRC sales on Monday and Tuesday this week could have funded the purchase of anywhere between 17,204 and 29,914 BTC.

Although that pace is certainly unprecedented — and likely unsustainable — if it were to actually persist, Strategy’s rate of purchases would remove over 10% of the circulating supply of BTC from the market within 12 months.

Skeptical as ever, Coffeezilla published an 18-minute video on his second YouTube channel, which boasts 1.5 million subscribers and is reserved for higher production content.

The sleuth questioned almost every claim about STRC made by its issuer, Michael Saylor’s BTC acquisition company Strategy. He cautioned against CEO Phong Le’s advice to consider STRC for someone’s primary savings, including people living paycheck-to-paycheck.

He highlighted why STRC is not a bank account, money market, nor any type of insured savings product. 

Not a bank account, money market, or fixed income

Coffeezilla also highlighted the lack of redemption rights of STRC holders who must re-sell their stock to other traders, not the company, in order to get their money back. 

He contested any characterization of voluntary dividend payments as “fixed income” and lamented promoters misrepresenting its features to Main Street workers.

Coffeezilla’s criticism racked up 800,000 views in less than 24 hours. He compared STRC’s 11.5% yield to Terra Luna’s unsustainable returns on its Anchor stablecoin offering that once reached 20%, and flagged Strategy’s junk B- credit rating from S&P. 

He was particularly concerned that 80% of STRC buyers are retail investors, indicating a lack of financial sophistication for a highly sophisticated, leveraged, and financially engineered offering. 

Coffeezilla then zeroed-in on Saylor’s repeated comparisons of STRC to money market funds, even though STRC isn’t any type of money market fund, noting that Strategy itself admits that it’s “not required to hold any assets to back the STRC Stock.”

Strategy now holds more than 780,897 BTC at an average cost basis of $75,577. BTC actually trades near $74,000, meaning its entire treasury is underwater.

Coffeezilla controversy with STRC suitcoiners

Adam Livingston, a staunch supporter of Strategy, posted a 32-minute rebuttal within hours. He opened with his characteristically sensational style, falsely claiming, “STRC is the greatest fixed income investment ever.”

Coffeezilla disagreed wholeheartedly, saying, “STRC is not fixed income, it’s variable. It doesn’t guarantee return of principle which is famously what fixed income does.”

ZachXBT, the on-chain investigator, rebuked Livingston’s combative tone.