Economist Saifedean Ammous, author of The Bitcoin Standard, argues that corporate Bitcoin treasury companies may struggle to compete with Michael Saylor’s Strategy. According to the company's Monday 8-K filing, Strategy holds 847,666 BTC, acquired for a total of $63.95 billion. This scale provides the firm with a competitive advantage, allowing it to secure financing at lower rates compared to smaller market participants.
Strategy maintains a cash reserve of $5.02 billion, which is designated for debt interest and preferred stock dividends. During the summer, when Bitcoin prices dropped below $60,000, the company increased its annual dividend rate for STRC preferred stock to 12%. The firm also utilized share repurchases and temporary Bitcoin sales to manage its financial obligations before returning to its accumulation strategy.
Ammous noted that while Strategy is well-positioned to withstand market volatility due to its cash reserves, direct Bitcoin ownership remains his preferred approach. He suggested that businesses with positive cash flows might increasingly adopt Bitcoin as a long-term reserve asset, provided they distinguish these holdings from operational capital. He also warned that investing in Strategy involves specific corporate risks.
Looking ahead, Ammous anticipates that the next Bitcoin cycle could reach its peak in 2029. Based on the Bitcoin power-law model, he estimates that the price of the cryptocurrency could reach approximately $200,000 by 2030. He added that smaller market drawdowns could potentially increase the appeal of Bitcoin for large-scale asset managers as previous bear market cycles fade from memory.
