Buck Labs Launches Bitcoin-Dollar Token with 7% Yield Based on Strategy Preferred Stock

New Financial Product Based on Strategy Preferred Stock

Buck Labs, a company registered in the Cayman Islands, has unveiled a new crypto token called "Buck," marketed as a "Bitcoin-Dollar" that targets an annualized yield of approximately 7 percent ^[1]. The product is based on an idea from Strategy founder Michael Saylor, who suggested in December at the "Bitcoin MENA Conference" that institutions should launch funds or other products based on the preferred stock of Bitcoin Treasury Companies ^[1].

The token is intended to be indirectly backed by Strategy's preferred stock STRC, a variable dividend security whose price is intended to remain stable near $100 USD ^[1]. STRC currently pays an annual dividend of 11 percent with monthly distributions ^[1]. The Buck token runs on the Ethereum blockchain and is initially priced at one US dollar ^[1].

Travis VanderZanden, founder and CEO of Buck Labs, stated: "People want a simple way to earn rewards with cryptocurrencies without becoming speculators, and that's exactly what Buck was designed for" ^[1]. Michael Saylor shared the announcement via his social media account ^[1].

Criticism of the Business Model

However, the concept has met with significant criticism. According to the whitepaper, token holders have no claim to the underlying assets ^[1]. Influential social media account Pledditor called the product a "terrible deal" and criticized that the token is not backed by assets and not pegged to a currency ^[1].

A major point of criticism is the yield differential: While Buck targets approximately 7 percent annually, STRC currently pays holders 11 percent directly ^[1]. A potential advantage of the token could be its greater accessibility, as crypto tokens can generally be purchased by anyone, while US securities like STRC require a brokerage account ^[1]. The token explicitly does not target US citizens ^[1].

Strategy Stock Rises Following MSCI Decision

Parallel to the Buck announcement, Strategy's stock posted significant gains. The stock rose by as much as 7 percent after global index provider MSCI completed its lengthy review of Digital Asset Treasury Companies and decided not to exclude them from its equity indices for now ^[2].

The stock traded above $170 USD in early trading before falling back to approximately $165 USD, representing a 4 percent increase ^[2]. The rally followed MSCI's confirmation that the current treatment of Digital Asset Treasury Companies will be maintained, provided they continue to meet existing requirements ^[2].

MSCI had been reviewing whether companies holding the majority of their assets in Bitcoin or other digital assets should be classified as "investment-oriented" entities, which would have disqualified them from inclusion in widely used benchmarks ^[2]. Analysts had estimated that Strategy alone could have faced up to $2.8 billion in forced sales if MSCI had implemented an exclusion ^[2].

Restrictions Remain in Place

However, the decision was not without limitations. MSCI stated that index weightings will not be increased to account for new share issuances by Digital Asset Treasury Companies ^[2]. This could limit Strategy's ability to expand its index presence as the company issues shares to purchase more Bitcoin ^[2].

MSCI also signaled that exclusion remains possible in the future, noting that further research is needed to distinguish between operating companies and investment-oriented entities ^[2]. Strategy currently holds Bitcoin worth nearly $63 billion USD, making it the largest publicly traded corporate holder of the cryptocurrency ^[2].