STRC Is Losing Buyers to Strive's 15% SATS. Here's Why.

Welcome to the Bitcoin Balance Sheet. Each Friday, we recap key insights from our podcast hosted by our very own Tyler Rowe.

Strive's SATS IPO was upsized to $700 million, but where did the money come from? Parker White, Yves-André Graf and Sebastian Furn told Tyler why a 15% coupon pulled capital out of SATA, STRC and STRF, why the rating agencies won't matter for another $50 to $100 billion, and why STRC buybacks are about winning over institutions. Then Mike Flaum told Tyler why SATS is just bond math, why TLT is "the worst chart in history," and why Strategy will own 1.5 million BTC by the end of 2027.

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Strive's SATS Raise Split the Digital Credit Pie Instead of Growing It

Strive's SATS priced at $90 and was upsized to $700 million notional, raising $630 million in cash. On our livestream, Yves-André Graf said Strive has already bought 4,045 BTC, a 12.3% jump, and by his math should be the No. 2 treasury next week with more than 44,000 BTC. But Parker White of DeFi Development Corp. said much of the money wasn't new. A 15% coupon at a 10% discount works out to "north of 16," so holders sold SATA, STRC and STRF to get in. "The easy work is just like pay a higher rate and like steal from your compadres."

The hard work, Parker said, is bringing in net new money, and he floated Strategy putting $500 million into a "total billboard takeover of like middle America." Yves noted the agencies left Strategy at B- on October 16, but Parker said digital credit can take "probably 50 to 100 billion" more before ratings matter. With Strategy's STRC buybacks crossing about $2 billion, first-time panelist Sebastian Furn called them "the easiest and fastest way" to prove to institutions that STRC can hold $99 to $100.

Listen and subscribe for the panel's full thoughts on a tranched, securitized Bitcoin credit product and why Strive is a PT boat next to Strategy's battleship.

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Strategy Will Own 1.5 Million Bitcoin by 2027

Mike Flaum, a 26-year Silicon Valley tech veteran who models Strategy's and Strive's capital stacks as Grain of Salt, told Tyler that Strategy will hold "more than 1 and a half million Bitcoin" by the end of 2027, and Strive 100,000. "I don't think that's a crazy crazy number." His case starts with SATS, which he says is just bond math. It pays $15 on a $100 par, so if you buy at $50, your effective yield is 30%. Unlike Strategy's STRD, it pays daily from day one and is cumulative if a payment is missed: "every day you know that they're performing."

He calls TLT "the worst chart in history." It took 20 years to double, then in six years fell below where it started. A 2020 Treasury paying 0.625% dropped 18% in a year. Treasuries carry almost no risk, he said, but plenty of volatility, and still have to beat debasement of about 6.5% a year. Until December 1, 2025, the levers only worked one way. Now cash buybacks give prefs a pull to par, so "the levers work in both directions."

Listen and subscribe for Mike Flaum's full thoughts on his amplification decoder ring and the three little bears of Strive's capital stack.

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