STRC is being marketed as a "money market like" instrument. It's not. Brian's breakdown: STRC is preferred equity. There is no legal claim on the underlying Bitcoin. The dividend can be suspended at any time. Comparing it to treasury yields is misleading because treasuries carry sovereign backing. STRC carries the risk of a single company, a single custody setup, and a single person's decision-making. The yield is higher than treasuries because the risk is higher than treasuries. That's how markets work. And yet the discourse treats it as a risk-free digital credit product. Saylor himself is using "money market like" language, which is genuinely disingenuous.

The centralization risk is real and almost nobody wants to discuss it. Strategy is now the marginal buyer of Bitcoin. When one entity is purchasing 35 times the daily mining supply, that creates concentration risk at a scale the market has never seen. Michael's framing: if anything happens to one of the custodians holding Strategy's Bitcoin, whether it's Coinbase, Fidelity, or Anchorage, the stock is done. It doesn't matter if the Bitcoin is segregated across three custodians. A single failure craters the entire vehicle and everyone downstream of it.

Virtually every treasury company copycat has already failed. Jackson shared an anecdote about speaking with a Goldman Sachs private wealth advisor whose clients invested in an actively managed crypto fund that went to zero and never returned capital. Michael pointed out that public companies that announced Bitcoin treasury strategies have quietly sold their holdings during the drawdown with no public disclosure. One company he found through a quick Perplexity search had puked out half its Bitcoin and nobody knew. The market anchors to Strategy as the outlier. But if you look at the rest of the field, 99% are wrecked.

Consumer inflation sentiment just hit a level worse than the 2008 financial crisis. A record 54% of Americans say their financial situation is worse compared to a year ago due to higher prices. This has risen 900% since 2021. Consumers are now expecting inflation to rise 4.8% over the next year. Michael's point: if they're expecting 4.8%, the real number is probably closer to 15%. And that's before whatever happens next with oil and commodities. Brian added the structural piece: every crisis gets "solved" by printing more money, which makes the next round of inflation worse. We've passed the event horizon. It only accelerates from here.

A shoe company just became an AI company and the stock went up 875%. Allbirds, down 99% from its all time high, announced it's selling all footwear assets and rebranding as "Newbird AI." The stock exploded. Brian's friends were texting him about it. This is what happens when people can't save, can't afford homes, and can't keep pace with inflation: they gamble. Prediction markets, sports betting on crypto exchanges, meme stocks, shoe-companies-turned-AI-plays. The nihilism is the symptom. The broken money is the disease.

We wrestled with whether the Strategy trade is good for Bitcoin or a ticking time bomb.

The bull case: These products exist in a fiat world and that's the reality we live in. Capital formation around Bitcoin is net positive. Strategy is the marginal buyer driving price higher. The STRC product is interesting financial engineering. Nobody is forced to participate. And if it works, it accelerates Bitcoin adoption at a scale that nothing else can match. Being anti-STRC is being anti-progress.

The risk case: The nomenclature keeps changing: amplified Bitcoin, digital credit, money market like. Every time someone points out the risk, the goalposts move. There's no legal claim on the underlying Bitcoin. The dividend can be suspended. The custody is concentrated. And the entire trade relies on one company, one person, and the assumption that nothing goes wrong at the custodial level in an industry where things have gone wrong at the custodial level every single cycle. FTX, Celsius, BlockFi. 17 years of Bitcoin and every credit instrument layered on top has eventually blown up. Why would this be different?

Where we landed: Michael's framing cut through it: we could be completely wrong, and we still have a wonderful business. Because the people with real money, the ones managing significant pools of capital, don't want any of this complexity. They want their Bitcoin in cold storage. They want to go back to their life. The beauty of staying humble and stacking sats is that it has worked for 17 years. Everything else is theoretical. You don't have to participate in any of it. You can just hold spot Bitcoin and let everything else shake out.

The S&P just hit 7,000. Bitcoin is at $77K. And more Americans believe their financial situation is deteriorating than at any point since they started measuring it, including during the 2008 crisis and the stagflation of the 1970s.

The nominal numbers going up and the real purchasing power going down is not a contradiction. It's the same phenomenon. The money is broken. Every Dow milestone, every S&P record, every CPI print is just measuring the debasement from a different angle. And until the money is fixed, the gap between what things cost and what people earn only widens.

Brian's point is worth sitting with: the cure is always worse than the disease. Every credit contraction gets "solved" by printing more money. Every crisis becomes an excuse to debase further. And the people who step outside that cycle, who actually understand how money works and save in assets that can't be inflated away, are the ones who come out the other side.

This week's action: Stop layering risk on top of Bitcoin.

The simplest trade in this market is still the best one. Hold spot Bitcoin. Get the custody right. Go back to your life. You don't need amplified exposure. You don't need digital credit instruments. You don't need to speculate on whether a single company's preferred equity will keep paying a dividend.

Ask yourself:

There's a reason people with real money want their Bitcoin in cold storage with institutional-grade security. They've seen what happens when complexity gets layered on top of a simple asset. It always ends the same way.

We help individuals, businesses, and institutions who own Bitcoin (or want to) secure it properly: institutional-grade custody, inheritance planning, financial services, and access to a team that knows what they're doing.

If you're holding serious BTC and haven't pressure-tested your setup, or if you're building a position and want to do it right from the start, let's talk.

Book a 15-minute call here

— Jackson

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