A new Brazilian exchange-traded fund designated DIGY11 is designed to convert income from Bitcoin-linked corporate securities into monthly distributions paid in Brazilian reais. While Bitcoin underpins the balance sheets of the companies issuing those securities, the ETF itself would be tied far more closely to Strategy's preferred-stock market than to BTC's day-to-day price movements. Strategy, formerly known as MicroStrategy, is the largest publicly traded corporate holder of Bitcoin.

Nearly the Entire Fund Concentrated in STRC

According to details reported on August 13 by Coindesk, DIGY11 is already listed in Brazilian fund data as pre-operational and is expected to begin trading in early September. The fund would track the MarketVector Bitcoin Treasury Preferred Equity BRL Hedged Index.

The 95% allocation makes STRC the product's defining holding from inception. STRC is Strategy's Variable Rate Series A Perpetual Stretch Preferred Stock. Its dividend rate can be adjusted as Strategy seeks to keep the shares trading near their $100 stated amount, and the company moved payments to a semi-monthly schedule in June. Additional details are available on Strategy's official page.

The remaining 5% would go into Strive's SATA preferred stock. Strive, which has also adopted a Bitcoin treasury strategy, maintained SATA's annual dividend rate at 13% for August.

A five percent secondary allocation provides limited diversification. DIGY11's performance would depend heavily on how STRC trades and whether Strategy can continue supporting the security through its dividend policy, financing activity, and balance-sheet management.

Bitcoin remains relevant, but not in the same way it functions for a spot ETF. STRC can move on corporate events even when BTC heads in the opposite direction. This summer, for example, STRC rebounded after Strategy revised its preferred-stock framework while Bitcoin continued declining.

Source of Monthly Income

Bitcoin itself does not pay a dividend. Strategy and Strive do.

DIGY11 would collect distributions from STRC and SATA, passing that income to shareholders monthly in reais. The fund targets approximately CDI plus 3 to 5 percentage points annually, net of estimated costs.

CDI — Brazil's interbank certificate of deposit rate and the standard benchmark for local fixed-income returns — currently sits around 14.15%, making the nominal target elevated. Brazil also operates with significantly higher local interest rates than the United States, which renders direct comparisons with dollar-denominated yields misleading.

The underlying dividends arrive in dollars, creating an additional challenge for a Brazilian fund. DIGY11 plans to roll one-month USD/BRL forwards to mitigate currency fluctuations rather than leave shareholders fully exposed to exchange-rate movements.

A stronger real could otherwise erode the value of distributions after conversion. The hedge also limits gains from a stronger dollar and carries pricing effects stemming from the interest-rate gap between Brazil and the U.S.

Strategy's Bitcoin Does Not Collateralize STRC

The most significant risk is easy to overlook because Strategy holds such a substantial amount of Bitcoin.

Strategy states explicitly that STRC and its other preferred securities are not collateralized by BTC holdings. Preferred holders rank above common shareholders in claims on residual assets, but no designated pool of Bitcoin secures the shares.

An SEC filing covering another fund built around STRC and SATA also describes the securities as unsecured obligations dependent on the creditworthiness of Strategy and Strive.

Strategy provided a relevant example in July when it sold 3,588 BTC for $216 million, with part of the proceeds earmarked for dividend obligations on its Digital Credit securities. There was no default and no missed payment; the sale demonstrated how Bitcoin can be deployed within Strategy's broader financing operations without directly securing STRC holders.

The high distribution target does not shield investors from losses. STRC and SATA can trade below their stated amounts, meaning monthly income can be positive while an investor's total return is negative. Both dividend structures can also change, and payments remain subject to their respective terms and board decisions.

Brazil Adds Another Layer to Bitcoin Investing

Brazil was among the first markets globally to list spot crypto ETFs, and B3 added options on Bitcoin, Ether, and Solana futures in July.

DIGY11 occupies a different space entirely: rather than wrapping spot BTC, it packages the corporate yield generated by companies whose balance sheets are built around Bitcoin.

For OranjeBTC, the product also introduces Strategy's increasingly complex Bitcoin financing model to a new market. Strategy has issued multiple layers of securities — convertible debt, preferred shares, and credit instruments — to fund Bitcoin acquisitions, creating a new category of Bitcoin-linked corporate paper that DIGY11 would package for retail access. Brazilian investors would not need to purchase STRC directly in the U.S. — they could access it through a locally listed ETF, with monthly distributions and a currency hedge layered on top.

The trade-off is that most of the risk would remain concentrated in a single corporate security. With 95% of the portfolio in STRC, Strategy's preferred-stock market would matter to DIGY11 investors almost as much as Strategy's Bitcoin holdings themselves.

Disclaimer: This article is for informational and educational purposes only and does not constitute financial or investment advice. DIGY11 remains pre-operational, its reported launch terms may change, and targeted distributions are not guaranteed. Preferred shares, currency hedges, and Bitcoin-linked corporate securities can all lose value.