About This Episode
In this week’s Hurdle Rate, the crew breaks down an explosive week across Bitcoin treasury markets, from Strategy reaching 0% net leverage and expanding its cash reserves to Strive growing its Bitcoin stack and seeing major liquidity across ASST and SATA. We dig into why liquidity itself can become a powerful competitive moat, how rising short interest could amplify ASST, and why Strive has chosen to let that pressure build rather than immediately satisfy large block demand. The conversation then turns to the macro setup, including a potentially weaker dollar, Treasury buybacks, rising long-term yields, and why those forces could create a backdrop for Bitcoin unlike anything it has experienced before. We close with the case for Bitcoin entering a broader melt-up in scarce assets, why the traditional four-year cycle may be breaking down, and why the crew believes investors still aren’t bullish enough. Here’s the latest with Matt Cole, Jeff Walton, Ben Werkman, and Tim Kotzman.
In This Episode
- 00:02:02 — Bitcoin Volatility Returns
- 00:03:40 — The SATA and ASST Two-Security Moat
- 00:12:44 — Building Liquidity Through the Bear Market
- 00:18:32 — Why SATA Stayed Near $100
- 00:28:50 — The Dollar, Treasury Yields and Bitcoin
- 00:30:15 — The Structural Dollar Bear Market
- 00:33:35 — Treasury Buybacks and Yield Intervention
- 00:38:34 — Bitcoin’s Grand Slam Macro Setup
- 00:40:44 — Bitcoin’s Four-Year Cycle vs. Gold
- 00:46:53 — Strive’s Positioning and Outlook
Episode Summary
Key Themes: Liquidity as a competitive moat; Strive’s two-security structure; ASST short interest; SATA’s controlled burn; weak dollar and Treasury intervention; Bitcoin vs gold.
Strive Crosses 21,000 Bitcoin
Strive acquired 1,110 Bitcoin for approximately $81.5M, bringing total holdings to 21,356 Bitcoin—over 1/1000 of Bitcoin’s supply cap. SATA returned to roughly par while ASST trading activity surged. Strategy expanded its USD reserve to $5.1B, repurchased another $136M of STRC and reached what the team described as 0% net leverage.
Liquidity Creates a Durable Moat
Jeff highlighted how unusual Strive’s two-security structure has become. Of nearly 5,800 companies across Nasdaq and NYSE, only a small number have two listed securities with meaningful ATM programs, and Strategy and Strive stand apart in size and liquidity. SATA averaged roughly $151M of daily volume over the prior 30 days, turning over ~2% of its market cap each day, which is far above traditional preferred securities.
Liquidity Is Difficult to Replicate
Matt compared the dynamic with major ETFs such as SPY. Competitors can offer nearly identical exposure at lower fees, yet incumbents remain dominant because size, distribution and liquidity reinforce one another. Once deep liquidity develops, investors naturally congregate around it, making the advantage increasingly difficult to dislodge.
The Bear Market Built the Foundation
Ben said Strive used the bear market to build rather than wait. The company scaled SATA, moved to daily dividends, strengthened investor relationships and deliberately cultivated liquidity. When Bitcoin suddenly moved from $64,000 toward $80,000, that infrastructure allowed capital to enter quickly. ASST volume surged to nearly $289M in a day, about 10x from the prior week.
Short Interest Adds Amplification
ASST’s short interest approached 30% of shares, which Matt said exceeded that of any S&P 500 company. As Bitcoin rallied, those positions potentially became forced future buyers. Strive also saw substantial block demand but deliberately avoided maximizing issuance. Management believes some large orders may represent shorts attempting to cover, making it potentially more advantageous to force them into the open market.
Managing the Controlled Burn
SATA’s short interest fell roughly 40% since June from approximately 1.2 million shares to just above 700,000. Matt believes Strive’s willingness to let SATA trade above $100 if necessary increased the risk of remaining short and encouraged covering. But with Bitcoin rallying, amplification falling and SATA demand strengthening, management concluded that capturing demand around par was currently more attractive.
Stability Comes First for SATA
Ben emphasized that allowing SATA to trade above $100 can create consequences for investors and funds that purchase at elevated prices. If management subsequently returns the security toward par, those buyers can suffer losses. The goal remains keeping SATA around $100 as consistently as possible while preserving flexibility when unusual short activity threatens long-term stability.
Index Flows Could Compound Liquidity
Jeff noted that a company’s rapidly expanding market cap could increase its weight in market-cap-weighted funds, creating additional structural demand. ASST climbed roughly 230 positions in US market cap rankings over six trading days. As Strive’s market cap continues to expand, passive ownership can rise alongside it, reinforcing liquidity and potentially amplifying organic demand and short covering.
The Dollar Is the Release Valve
Matt laid out what he views as an unusually bullish macro setup. The dollar has been in a multi-decade decline while US fiscal conditions continue to deteriorate. If policymakers refuse to resolve the debt problem through austerity or permanently higher Treasury yields, the remaining release valve is currency weakness. He believes DXY could ultimately fall from around 100 into the low 70s over the next several years.
Treasury Intervention Changes the Setup
Treasury Secretary Scott Bessent discussed expanding Treasury buybacks. Matt expects markets to test policymakers by pushing the 10-year yield above roughly 5.25%, potentially generating financial stress. He then expects increasingly forceful Treasury and possibly Federal Reserve intervention. Suppressing long-term yields while deficits remain large would likely place additional pressure on the dollar.
A Setup for Scarcity
Bitcoin’s historical bull markets have occurred during periods of dollar weakness, but Matt believes the coming environment could be substantially larger. A structurally weaker dollar, intervention in Treasury markets and AI eroding traditional corporate moats could create an unprecedented hunt for scarce assets. If Bitcoin continues regaining strength relative to gold, it could again become the “fastest horse.”
The Four-Year Cycle May Be Broken
Matt argued that Bitcoin’s previous nominal bull market was weaker than it appeared because Bitcoin failed to decisively outperform gold. He therefore views the recent downturn less as the end of a traditional four-year cycle and more as part of a longer scarce-asset supercycle. Sustained new highs versus gold would provide stronger evidence that a genuine Bitcoin bull market is beginning.
Main Takeaway: Strive believes its liquidity moat, two-security structure and managed amplification positions it to capitalize on a macro environment characterized by dollar weakness, policy intervention and a growing demand for scarce assets like Bitcoin.