The strategy (MSTR) is achieving some form of financial alchemy: the use of Bitcoin, historically a volatile asset, to create something that looks a lot like stability.
That is the offer of preferred shares (STRC) of $ 2 billion of $ 2 billion of the firm that offers a variable dividend of 9% and is designed to maintain the price of sharing around $ 100.
The offer does not provide investors with direct exposure to Bitcoin, but is supported by the asset in spirit and structure, according to a recent Nydig report.
The strategy has $ 71.7 billion in Bitcoin and only $ 11 billion in liabilities, which gives it space to deliver income even if cryptogram prices are submerged, the report points out.
Historically, Bitcoin has returned at least 3% –4% per year during any five -year section, while average returns have been significantly higher.
The strategy is to bet on what this return profile can use to maintain high payments without touching its cryptography stash, essentially turning Bitcoin’s long -term appreciation into monthly cash flow.
“Strc seems to us a high -performance vehicle, backed by bitcoins, commercial style, designed to operate about $ 100 torque while offering a much higher yield than traditional short -term instruments, although with a different liquidity profile,” Nydig wrote.
That premise has proven to be popular. The interests of investors promoted the strategy to quadruple the size of the offer from $ 500 million to $ 2 billion.
Strc may not be just a yield vehicle, but rather Bitcoin, reworking for traditional financial income investors. A kind of money market fund, remixed with crypt under the hood.
Read more: Michael Saylor builds a own performance curve with sale of high preferred shares
