Digital credit offers low-volatility Bitcoin yield
The guest argued that Bitcoin-backed perpetual preferred stock provides a high-yield, low-volatility alternative for risk-averse investors targeting the retirement crisis.
The argument
Cole explained that preferred instruments like SADA act as a structured carry trade where credit spreads widen in bear markets and contract in bull markets. This allows investors to capture double-digit yields with significantly less volatility than spot Bitcoin, while common equity absorbs the price fluctuations.
The thesis, stress-tested
✓ What validates it
- ✓The preferred security maintaining positive total returns during a 50% drawdown in Bitcoin's price
- ✓Continued investor demand allowing the issuer to accumulate Bitcoin reserves
▸ Risks discussed
- ▸Credit risk of the issuing company
- ▸A maximum interest rate cap of 20% within the product documents
- ▸Potential price discounts to par during severe market downturns
Hear it yourself
"Today's guest is Matt Cole, chairman and CEO of Strive. Welcome, Matt. Hey, Laura. How are you doing? Good. Excited to have you here. The last day yeah. Yeah. The last day of trading last week was, as you called it, quote, the most difficult day in the history of digital credit. STRC traded as low as $82.50, and SADA traded into the low nineties. This all comes on the heels of a month of drama in which the world of Bitcoin backed for petrol preferred stocks was the topic of discussion in many quarters of CryptoTwitter. We're gonna dive into all of these events and the debates around all that."
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