Crypto treasury companies, whose business model relies on holding crypto tokens, are turning to risky equity products to raise cash amid falling share prices. Following Strategy's lead, these firms are issuing perpetual preferred stocks like "Stretch" that offer high dividend yields but no upside potential. This strategy aims to attract investors seeking fixed returns rather than volatile crypto assets directly.

Strategy's Stretch product has attracted $10.5 billion since its listing about 10 months ago, offering 11.5% annual dividends paid monthly. Other companies like Strive Asset Management, co-founded by Vivek Ramaswamy, are launching similar products, with Strive promising 13% annual interest paid daily. This digital credit model has raised sustainability questions as dividend payments rely on ongoing capital raising.

The shift comes as crypto treasury shares have collapsed—Strategy, Smarter Web Company, and Capital B are down 60%, 30%, and 83% respectively—while bitcoin itself has fallen 32% over the past year. Companies like Paris-listed Capital B plan to list similar products in Europe, viewing this as the best way to maximize bitcoin holdings per share despite market saturation concerns.