What Bitcoin Did Strategy's Trillion Dollar Bitcoin Bet | Jeff Walton
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Jun 26, 2025 
Jeff Walton, a financial analyst and the Founder of True North, dives into Bitcoin treasury companies and the evolving landscape of Bitcoin-backed financial strategies. He discusses how innovative financial instruments could reshape the market, potentially redirecting trillions from fixed income to Bitcoin. Walton also examines the risks associated with corporate treasury models and the importance of security in Bitcoin investments. The conversation sheds light on navigating capital structures and the ethical considerations for new investors in this dynamic space.
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Strategy's Strong Financial Foundation
- Strategy holds 592,100 Bitcoin, worth about $62 billion, with $11 billion in debt, showing a healthy leverage ratio around 15-17%.
- Even if Bitcoin's price halves, Strategy's assets remain strong compared to its liabilities, ensuring financial sustainability.
Preferred Equity Attracts Fixed Income Capital
- Strategy's preferred equity products like STRF offer a fixed dividend disconnected from Bitcoin's price, attracting different capital pools than convertible debt.
- These products provide downside protection and steady income, broadening Strategy's access to large fixed income markets.
Superior Yield with Lower Risk
- Strategy's preferred equity yields are higher than traditional risky assets like Boeing or PG&E preferred stock, yet Strategy has less physical risk and six times over-collateralization.
- This makes these instruments very attractive compared to conventional fixed income investments.