DCAP’s Bigger Bet: Buying STRC and SATA When Others Sell

Tuttle Capital and Strive Asset Management launched the T-Strive Digital Credit Preferred Income ETF (DCAP) on September 24. The fund offers managed exposure to preferred shares issued by Bitcoin treasury companies, initially targeting roughly equal positions in Strategy’s STRC and Strive’s SATA. ^[1][2]

The most interesting feature is when it might buy. DCAP expects little or no leverage around par, with flexibility to increase exposure after prices fall and reduce leverage as they recover. Tactical purchases are generally expected to use borrowing to buy preferred shares, potentially adding buying power without fresh investor inflows. The fund also plans to sell puts, collecting premiums in exchange for potential purchase obligations. ^[1][3]

The ETF format could bring digital credit to a much wider audience. U.S. ETF assets grew from roughly $2.1 trillion in 2015 to $13.4 trillion at year-end 2025—more than 500%. ^[8] As adviser use of ETFs expands, DCAP could reach investors who prefer choosing a fund manager to monitoring individual preferreds. ^[9]

Income strategies already have momentum. Derivative-income ETFs, including covered-call funds, grew from about $33 billion at year-end 2022 to roughly $180 billion cited in August 2026—an increase of approximately 445% across those reported figures. ^[10][11] More than $55 billion in net inflows during 2023 and 2024 provides evidence of demand beyond growth from market returns. ^[12]

Goldman Sachs agreed in August to acquire NEOS Investments for up to $2.25 billion. NEOS managed $30 billion in options-based income ETFs; closing is expected in early 2027, subject to conditions. ^[10] DCAP could tap that appetite for managed income, bringing fresh buyers to digital credit. If demand develops, more funds could follow.

For STRC, that buying could complement Strategy’s own repurchases. The company bought back approximately 1.77 million STRC shares for $174 million during September 14–20, before DCAP launched. ^[6] Corporate repurchases can reduce preferred claims and future dividend payments. ETF purchases change ownership while leaving those commitments outstanding. ^[7]

Additional ETF demand could help STRC recover toward $100 faster, potentially reducing the corporate cash needed to support its price. That could leave Strategy more flexibility to retain cash or buy Bitcoin. The effect depends on fund size, financing and selling pressure: borrowing constraints or withdrawals could weaken the support, and cash redemptions may force DCAP to unwind positions. ^[3]

Common shareholders could benefit from better financing conditions. Consider a hypothetical preferred paying $12 annually: issuing it at $100 raises $100 before expenses for a 12% annual dividend cost; issuing it at $90 raises less cash for the same commitment, pushing that cost to 13.3%. Firmer preferred prices could therefore make future issuance more attractive for Strategy and Strive.

Buying existing preferreds pays their sellers, so ETF inflows do not directly fund the issuers. The benefit would come through better conditions for subsequent capital raises. New preferred issuance still adds claims and dividend commitments, even when common-share counts stay unchanged. Gross BTC per share does not capture that entire trade-off.

There is also a less obvious consequence: stronger demand could eventually mean lower income for preferred holders. Strategy adjusts STRC’s dividend rate to encourage trading around $100, with potential reductions above that level subject to its terms and discretion. ^[4][5] Its capital framework also allows buybacks and liquidity management to support the preferred without necessarily raising the rate. ^[7] Lasting demand could therefore ease the issuer’s financing cost while reducing investors’ future income. A gain from recovering toward par and the yield available afterward are separate parts of the return.

For DCAP holders, higher returns from borrowing alone would not establish investment alpha. The useful comparison is net total return against a STRC/SATA portfolio, accounting for leverage and drawdowns. Its disclosed annual expense estimate after the waiver is 0.95%, including 0.65% management fees and 0.30% estimated interest. The management waiver runs through September 30, 2027; borrowing costs can vary. ^[3]

Cash reserved for put obligations also limits available buying power. ^[3] And although Strive Asset Management is affiliated with SATA’s issuer, its research role excludes SATA and it cannot make DCAP’s investment decisions. ^[1]

DCAP could connect a growing income-ETF audience with preferreds that benefit from additional buyers during selloffs. The opportunity is to earn enough from dividends, premiums and price recovery to justify the costs—and potentially improve financing conditions for the issuers along the way.

Sources

1. Tuttle Capital launch announcement, September 24, 2026
2. Cboe new listing notice for DCAP
3. DCAP prospectus and statement of additional information, dated September 11, 2026, SEC
4. Strategy: STRC information
5. STRC offering prospectus, July 24, 2025, SEC
6. Strategy Form 8-K, September 21, 2026
7. Strategy’s Digital Credit Capital Framework, June 29, 2026
8. ICI President’s Opening Remarks, ETF Conference, June 9, 2026
9. ICI: The US ETF Market—FAQs
10. Goldman Sachs: Agreement to Acquire NEOS Investments, August 12, 2026
11. Reuters: Funds Selling Options Help Temper US Stock Swings, April 10, 2024
12. Cerulli Associates: Liquid Alternative ETFs See Increased Flows, June 25, 2025