About This Episode
In this week’s Hurdle Rate, the crew discusses SATA hitting $999 million outstanding, Strategy doubling its STRC repurchase facility to $2 billion, and Strive adding another 1,000+ Bitcoin. Ben breaks down the art and science of running the desk and why amplification stays on. Matt makes the case that we’ve never seen a bull market with a perpetual preferred model in place. We also get into executive comp and shareholder alignment, and close on macro: what happens if the 10-year breaks 7%. Here’s the latest with Matt Cole, Jeff Walton, Ben Werkman, and Tim Kotzman.
In This Episode
- 00:01:20 — SATA Nears $1 Billion
- 00:07:10 — Strive’s Flywheel and Amplification
- 00:09:34 — Strategy’s Push to Get STRC Back to 100
- 00:12:12 — The Art and Science of Capital Markets
- 00:15:33 — The First Bull Market With Perpetual Preferreds
- 00:17:44 — ASST Volume Up 9.7x in Three Weeks
- 00:20:00 — Competition and the Digital Gold Rush
- 00:26:55 — What Saylor Is Really Like
- 00:30:01 — Executive Comp and Shareholder Alignment
- 00:48:21 — Macro: What If the 10-Year Hits 7%?
- 00:59:22 — Private Credit Risk in Insurance
Episode Summary
Key Themes: SATA near $1B; scaling digital credit; STRC buybacks; balancing cash and amplification; capital markets execution; industry competition; shareholder-aligned compensation; fiscal dominance; managing risk.
SATA Approaches $1 Billion
SATA reached approximately $999 million outstanding, up 4-5x from its initial issuance less than a year ago. Strive’s total balance sheet also surpassed $2 billion across Bitcoin, cash and STRC. Jeff said the growth illustrates digital credit’s ability to tap capital pools that want different exposure than common equity or spot Bitcoin, creating multiple spigots that can finance Bitcoin accumulation.
STRC Buybacks
Strategy repurchased roughly $176 million of STRC without issuing MSTR common stock, using its separate operating cash reserve instead. With approximately $1.44 billion remaining in that reserve, Jeff said Strategy could sustain similar buybacks for weeks. Matt called it nearly an ideal week: no common issuance, a larger repurchase facility and meaningful cash deployed toward restoring STRC to par.
Finding the Right Amount of Cash
Matt said cash strengthens credit quality but eventually becomes a drag on amplified Bitcoin exposure. Strive maintains roughly 18 months of SATA dividend reserves—enough to withstand severe Bitcoin drawdowns without holding excessive depreciating cash. Management must balance the confidence of digital credit investors against its fiduciary obligation to maximize common equity return long-term.
The Flywheel Is Working
Strive’s structure now combines SATA issuance, roughly 50% amplification and a premium valuation on ASST. Matt compared it with a newly built rocket: the engine exists, but the job now is keeping it fueled without blowing it up. That means preserving amplification, avoiding encumbered Bitcoin and continuing to build trust and liquidity. Despite recent momentum, the team considers the company to still be in the early innings.
The Art of Capital Markets
ASST traded more than $225 million every day last week and exceeded $450 million on one day, giving Strive substantial issuance capacity. Yet management deliberately emphasized SATA over common issuance because excess common equity reduces amplification. Ben said the optimal mix can change repeatedly within a single trading day as Bitcoin, warrants, liquidity and investor demand evolve.
Perpetual Preferreds Change the Bull Market
Jeff noted that Bitcoin never experienced a full bull market with perpetual preferred equity operating at scale. Previous cycles relied largely on convertible debt, which provided finite, episodic financing. Digital credit can potentially provide a recurring stream of capital indefinitely. If investor demand continues growing alongside a stronger track record, Bitcoin treasury companies could acquire billions of dollars of Bitcoin each week through multiple financing channels.
Competition Raises the Standard
Matt described the next decade as a digital gold rush. Bitcoin treasury companies may share similar beliefs and help one another, but they are still competing aggressively for Bitcoin, capital and investor attention. He used Kobe Bryant’s famous competitive mentality as the analogy: respect your peers while still trying to win. Ben said that competition forces every company to improve its products, execution, governance and capital market strategy.
Compensation Should Follow the Hurdle Rate
The discussion then turned to executive incentives. Strive designed its compensation system from scratch because traditional corporate benchmarks did not fit a Bitcoin balance sheet company model. Short-term incentives focus on metrics management can influence annually, particularly Bitcoin yield and meeting SATA dividend obligations. Long-term incentives are primarily tied to the ultimate objective: outperforming Bitcoin, while also considering conventional equity benchmarks relevant to institutional shareholders.
Building An Elite Team
Strive started at the 50th percentile of pay because, as Matt put it, “we had proven nothing.” But the goal was never to be a median company—it was to build the Yankees, Dodgers or Lakers of the space. If performance is earned on the field, compensation may need to move toward the 75th percentile to retain the best talent, while remaining aligned with shareholders.
Prepare for the Tail Without Missing the Base Case
Matt revisited the possibility that long-term Treasury yields could spike before policymakers intervene. He assigned an illustrative 10–20% probability of a severe scenario where yields rise enough to pressure Bitcoin and other risk assets. Strive’s answer is not to position primarily for that outcome, but to ensure its structure can survive it while remaining aggressively positioned for the more probable bullish case.
Upside Risk Matters Too
Ben and Jeff emphasized that risk management cannot focus exclusively on downside. Waiting for a perfect Bitcoin entry or a macro crisis may leave investors sidelined if Treasury intervention comes earlier than expected. If fiscal stress ultimately requires massive liquidity injections, scarcity becomes particularly valuable. The objective is therefore to remain exposed to the structural upside without using leverage that could force liquidation during temporary drawdowns.
Main Takeaway: Digital credit is scaling into a repeatable capital engine, and Strive believes success requires balancing credit strength with amplification, staying nimble in capital markets, aligning management incentives with Bitcoin outperformance and surviving downside scenarios without sacrificing larger structural upside.