In Episode 29, True North episode 29: The crew does a deep dive into MSTR’s leverage and the future outlook! Also included – Stride IPO insights, Bitcoin volatility, BTC yield projections, S&P 500 potential,… Key discussion points include mstr leverage, strd ipo, btc volatility, future products, yield curve & credit spreads. Market context: MSTR closed at $387.11 with mNAV at ~1.91.
Market Snapshot
- Date: 6/11/25
- MSTR Open/Close: $391.23 / $387.11
- Volume: 6,812,152 shares
- mNAV: ~1.91
- Market Cap: ~$108.13B
- U.S. Market Cap Rank: 94
- BTC Held: 580,955
Chapters
- 00:00:00 — Intro: Cue the music and agenda overview
- 00:04:47 — MSTR leverage: Debunking MSTR’s leverage myths with data
- 00:12:02 — STRD IPO: How Stride IPO works & why it matters for MSTR
- 00:20:41 — BTC volatility: Impact of Bitcoin volatility on MSTR’s capital strategy
- 00:24:52 — Future products: What’s next? Potential new products & global expansion
- 00:33:00 — Yield curve & credit spreads: Fixed income ideas & STRK, STRF, STRD comparison
- 00:45:00 — BTC as collateral: How the market is starting to price Bitcoin as collateral
- 00:50:59 — Leverage & $STRD: MSTR leverage strategy for future market downturns
- 00:58:00 — Market dynamics: Demand trends & capital stack effects
- 01:04:06 — Q2 earnings: MSTR Q2 earnings estimates & S&P 500 potential
- 01:11:00 — BTC yield: Long-term Bitcoin yield projections to 2035
- 01:22:52 — BTC CAGR: Why Bitcoin’s CAGR could fuel exponential market cap growth
- 01:30:42 — Market sentiment: Investor reactions & long vs short-term strategy debate
- 01:35:45 — Seeing into the future: Thinking like a visionary and pattern recognition
- 01:42:46 — Why hold an equity?: Pay now for future performance & DNA of future MAG7
- 01:48:52 — The BTC Standard: A world with energy that doesn’t decay; BTC exposure and UBI
- 02:00:00 — Closing insights: Final thoughts on strategy, risk, and market opportunity
Episode Summary
Key Themes: Fixed-income disruption; STRD launch; four-part ATM; credit-spread compression; Bitcoin collateral; ratings catalyst; bear-market flexibility; digital credit scaling.
Leverage Reality Check
The episode focuses on Strategy’s rapid evolution from a leveraged Bitcoin equity into a diversified digital credit platform capable of attracting multiple pools of fixed-income capital. Jeff begins with the leverage update, emphasizing that Strategy remains far less levered than critics suggest. With approximately 582,000 Bitcoin worth nearly $63 billion against about $11.4 billion of debt and preferred stock, the company’s leverage ratio remains below 20%. Adjusting for convertible debt already trading like equity lowers it further. The balance sheet is therefore not approaching a margin call; Bitcoin would have to fall below roughly $14,000 and remain there through future maturities before asset coverage became a serious concern.
STRD’s Built-In Flexibility
The launch of STRD, or Stride, is presented as the latest piece in Strategy’s capital-markets architecture. Unlike the cumulative dividends on STRF and STRK, STRD’s dividend is noncumulative, giving Strategy additional flexibility during an extreme downturn. Jeff and Dan describe it as the lower-rated or “junk” layer of the preferred stack: it offers investors greater yield in exchange for more risk, while allowing Strategy to raise capital even when the balance sheet’s leverage ratio has temporarily risen because Bitcoin has fallen. In a bear market, STRD could help the company continue buying Bitcoin, support Bitcoin yield, or potentially repurchase common shares without weakening the credit quality of the more senior preferreds.
The Four-Part ATM
This produces what Adrian calls the four-part ATM: MSTR common stock alongside STRF, STRK, and STRD. Each security appeals to a different investor. STRF offers senior, bond-like income; STRK combines income with a perpetual conversion option into MSTR; STRD offers higher yield and greater risk; and MSTR retains the largest share of Bitcoin’s upside and volatility. Strategy can issue whichever security is experiencing the strongest demand, converting capital from several distinct markets into additional Bitcoin. The panel views this flexibility as a major competitive advantage because Strategy no longer depends on one instrument or one investor base.
Spread Compression Opportunity
The discussion then turns to how the market should value these preferreds. Jeff charts their yields and credit spreads, meaning the additional yield investors receive above the risk-free rate. STRF and STRK initially traded at unusually wide spreads because the market did not understand the products, Bitcoin collateral, or Strategy’s ability to service the dividends. As investors become more comfortable, their prices have risen and their yields have fallen. Dan argues that this initial repricing may be a one-time opportunity: once the market broadly accepts Bitcoin-backed credit as legitimate, future products may never again be launched with similarly distressed yields.
The Credit Rating Unlock
A formal credit rating could accelerate that process. Many institutional fixed-income portfolios cannot purchase unrated preferred securities regardless of their collateral strength. A credible rating would open the instruments to a much larger group of pension funds, insurers, bond managers, financial advisers, and retirement accounts. Jeff goes further, suggesting that STRF’s spread could eventually approach—or even fall below—the yield on U.S. government debt if Strategy continues accumulating Bitcoin while maintaining conservative leverage. The argument is not that the preferreds are currently risk-free, but that transparent, liquid, and heavily overcollateralized Bitcoin-backed securities may eventually compare favorably with legacy credit carrying physical, operational, or sovereign risk.
Liquidity as an Edge
Liquidity is another central advantage. Traditional preferred stocks and corporate bonds can be difficult to trade, particularly in size. Strategy’s preferreds are already unusually liquid while offering substantially higher yields than many less-liquid alternatives. That combination could make them attractive to older investors shifting from wealth accumulation to income preservation, especially as monetary debasement raises the amount of income required to maintain the same standard of living.
Exponential Yield Engine
The long-term opportunity is presented as enormous relative to the existing market. Jeff estimates that even hundreds of billions of dollars in cumulative preferred issuance would remain a tiny fraction of the global fixed-income and real-estate markets. Dan describes the mechanism as exponential yield on an appreciating asset: Bitcoin compounds on Strategy’s balance sheet, while preferred issuance allows that growing collateral base to generate additional Bitcoin. The preferreds are therefore not a side project; they may become the primary mechanism through which Strategy converts demand for traditional income into sustained Bitcoin accumulation.
Main Takeaway: Strategy is building a complete Bitcoin-backed yield curve, using STRF, STRK, STRD, and MSTR to attract different forms of capital and create a scalable bridge from the enormous fixed-income market into Bitcoin.