About This Episode
In this week’s Hurdle Rate, the crew unpacks a market that has come roaring back to life, from Strategy returning as a Bitcoin buyer at 0% net leverage to Strive growing its stack 14.4% in two weeks to 23,156 Bitcoin. Jeff brings back lessons from Bitcoin Asia, where investors are building structured finance on top of Bitcoin and digital credit faster than the US, and we dig into why STRC hasn’t snapped back to par, how amplification and liquidity have to be earned rather than dialed in, and why Strategy’s balance sheet may be the most misunderstood credit story in the market. We then take on MSCI’s proposed exclusion of digital asset treasury companies and why it would effectively make index providers investment advisers, before closing on macro: fiscal dominance, why long-end yields go higher whether the Fed hikes or cuts, and why this is a backdrop Bitcoin has never seen. Here’s the latest with Matt Cole, Jeff Walton, Ben Werkman, and Tim Kotzman.
In This Episode
- 00:02:29 — Lessons from Bitcoin Asia
- 00:15:37 — Strive Grows to 23,156 Bitcoin
- 00:17:44 — Strategy Returns as a Buyer
- 00:19:22 — Why STRC Hasn’t Hit Par
- 00:23:28 — Strategy’s Zero Net Leverage
- 00:33:41 — The MSCI Fight
- 00:47:07 — Macro: Jackson Hole and Yields
- 00:53:29 — A Backdrop Bitcoin Has Never Seen
- 00:59:44 — The Natural Rate on Long Bonds
Episode Summary
Key Themes: Asia’s demand for Bitcoin exposure; structured finance on digital credit; Strive’s Bitcoin accumulation; Strategy’s reset; MSCI’s proposal; fiscal dominance; Bitcoin vs gold.
Asia’s Bitcoin Demand
Jeff returned from Bitcoin Asia with a clearer view of how differently Asian investors approach risk and innovation. Hong Kong investors face limits on direct crypto exposure but can hold Nasdaq-listed securities, creating demand for Bitcoin-linked equities such as ASST and MSTR. He also saw growing interest in structured finance, Bitcoin-backed borrowing and digital credit on platforms such as Hyperliquid.
Digital Credit As A Building Block
Some investors are increasingly treating digital credit not as an end product, but as financial infrastructure: they’re asking how SATA, STRC and similar securities can serve as collateral, support leverage or be repackaged for different markets. Ben said Asian investors’ willingness to move quickly and employ leverage could make the region an important laboratory for Bitcoin capital markets.
Strive Accelerates Bitcoin Accumulation
Strive acquired another 1,800 Bitcoin for approximately $143M, bringing holdings to 23,156 BTC. Over two weeks, the company increased its stack roughly 14.4%. Jeff said the capital-market flywheel is beginning to work as designed: stronger ASST valuations and SATA trading near par allow Strive to raise capital and convert it into Bitcoin.
The Amplification Strategy In Action
Matt said the market is beginning to recognize why Strive deliberately built amplification during the bear market. The company pushed its amplification ratio above 60% when Bitcoin was weak; as Bitcoin appreciated, that ratio declined toward 50%, leaving additional capacity. SATA’s daily dividends support the financing side while ASST gives common shareholders amplified Bitcoin exposure.
Strategy Finishes the Foundation
Strategy reached what the team described as 0% net leverage after building billions of dollars of USD assets and addressing convertible debt concerns. It also resumed Bitcoin purchases while continuing STRC buybacks. Ben said the company can now shift from defensive balance sheet construction toward restoring STRC to par and financing future Bitcoin accumulation.
STRC’s Recovery Takes Time
The group pushed back on the idea that STRC’s failure to immediately return to $100 signals a structural problem. Leveraged positions unwound during the summer created forced selling that requires time and new capital to absorb. Strategy’s cash reserve, buybacks and improving liquidity are steadily rebuilding the investor base.
Bitcoin Does Not Need Strategy
Bitcoin’s move from the low-$60,000s toward $80,000 occurred largely while Strategy was absent as a buyer. Ben said this rebutted claims that Strategy alone supports Bitcoin’s price. Bitcoin trades tens of billions of dollars daily across a global network of individuals, corporations and governments.
A Large Balance Sheet Creates Optionality
Jeff compared Strategy’s expanding treasury with major insurance institutions. If Bitcoin returns to prior highs, Strategy could quickly control a balance sheet exceeding $100B, giving it the ability to take on risks and create products that would have been impossible only a few years ago. Digital capital can therefore transform both valuation and strategic capability.
MSCI Risks Becoming an Active Arbiter
Matt praised Strategy’s response to MSCI’s proposal to exclude Bitcoin treasury companies from its indexes under a framework that characterizes them as non-operating. MSCI has long argued that index providers should not express opinions on whether companies or strategies are good or bad, yet excluding companies based on Bitcoin holdings would effectively impose such a judgment. Matt said that begins to resemble investment advice rather than passive index construction.
The Precedent Matters More Than the Flows
Ben argued that the immediate index-related capital at risk matters less than the precedent. Bitcoin is broadly recognized as a commodity, and excluding corporations because they hold too much of it would amount to an active stance on corporate capital allocation. Strive plans to submit its own response and believes the industry should push back before similar restrictions spread.
Fiscal Dominance Changes the Macro Regime
Matt argued that the United States and Japan are entering an era of fiscal dominance, where government debt levels matter more than ordinary central bank rate decisions. Raising short-term rates can worsen sovereign credit conditions and push long-term yields higher. He believes US long-end rates will continue rising until the Treasury or the Fed intervenes more aggressively.
Bitcoin Reclaims the Fastest-Horse Position
Despite higher bond yields, Bitcoin has strengthened relative to gold. Matt views that as critical because the previous Bitcoin rally produced nominal dollar highs without decisively outperforming gold. If Bitcoin reestablishes itself as the strongest scarce asset while fiscal stress, currency debasement and AI-driven abundance accelerate, he believes the long-term upside could be substantially larger than the market appreciates.
Main Takeaway: Digital credit is evolving from a financing product into a broader capital-market layer, giving Strive and Strategy an ability to accumulate Bitcoin, build larger and more flexible balance sheets, expand globally and provide amplified Bitcoin exposure during a Bitcoin bull market driven by fiscal dominance and renewed strength relative to gold.