Strive's Matt Cole on SATA’s and STRC's Depeg
Speakers
Matt Cole
— Chairman and CEO, Strive
Summary
Matt Cole, Chairman and CEO of Strive, discusses the recent depeg of Bitcoin-backed preferred equities SATA and STRC, attributing the stress to leveraged liquidations rather than credit issues. He outlines the investment theses for Bitcoin, SATA, Strive's common equity (ASST), and expects STRC to recover to par as Strategy shores up cash reserves. Cole emphasizes Bitcoin's long-term debasement trade and the role of structured finance in bringing Bitcoin exposure to income-oriented investors.
- Strive's SATA demonstrated positive total returns despite Bitcoin's 50% drawdown.
- The STRC drop to $82.50 was likely a leveraged liquidation event, not a credit failure.
- Strive maintains 18-month cash reserves to cover SATA dividends through any bear market.
- Cole remains bullish on Bitcoin, citing fiat debasement and a 30% CAGR thesis over 10-15 years.
- Strive's common equity (ASST) is designed to amplify Bitcoin returns, outperforming if BTC CAGR exceeds 13%.
- Cole expects STRC to gradually return to par as Strategy adds cash reserves and Bitcoin recovers.
- He advocates self-custody of Bitcoin but sees digital credit as a better risk-return option for volatility-averse investors.
- Digital credit is early in its development and could ultimately attract ETF products and broader adoption.
Ideas
Bitcoin debasement trade fuels sustained appreciation.
Matt Cole expresses a strong long-term Bitcoin bull thesis, citing fiat currency debasement as the primary driver, a digital gold rush era with a 30% CAGR expectation over the next 10-15 years, and Strive's aggressive accumulation in the bear market as evidence of underwriting that view.
High-yield preferred with positive total returns.
Strive's preferred equity SATA offers high-yield income (currently 13% annual rate), daily dividends that reduce volatility, and has delivered positive total returns even during a 50% Bitcoin decline. The company backs it with an 18-month cash reserve, demand is described as nearly insatiable, and the instrument is designed for income-oriented investors who want Bitcoin exposure with lower volatility.
Outperforms Bitcoin if cycle CAGR exceeds 13%.
Strive's common equity (ASST) is structured to amplify Bitcoin returns, meaning it will likely outperform Bitcoin over a full market cycle if Bitcoin's compound annual growth rate exceeds the company's cost of capital (~13%), while also exhibiting greater downside in bear markets. Coupled with Strive's max accumulation mode, ASST offers a leveraged Bitcoin play for long-term bulls.
Liquidation-driven dip, STRC returns to par.
The recent STRC price decline into the low $80s was driven by leveraged liquidations rather than fundamental credit deterioration. Cole expects STRC to eventually return to par, supported by Strategy's deliberate cash accumulation and improving creditworthiness, though the timing depends on Bitcoin's performance and corporate actions.
