Breaking Down Michael Saylor’s BTC Strategy and How A DeFi Team Is Rebuilding It For ETH

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Mar 7, 2025

The podcast delves into Michael Saylor’s innovative BTC strategy and its effectiveness through convertible debt. It highlights ETH Strategy's approach in adapting this model for Ethereum, using an autonomous treasury and long-dated convertible debt. The contributors discuss DeFi innovations that enhance liquidity and market stability for ETH holders. They also explore the dynamics of Gamma Trading, risks involved, and the importance of community engagement within the crypto ecosystem, emphasizing a blend of traditional finance with decentralized solutions.

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INSIGHT

MicroStrategy's Leveraged Bitcoin Strategy

MicroStrategy uses convertible debt to buy Bitcoin, giving lenders the option to convert debt into shares.
This allows Saylor to gain leveraged exposure to Bitcoin over a four-year period.

INSIGHT

MicroStrategy Bond Buyers

Initially, MicroStrategy attracted buyers seeking Bitcoin exposure with downside protection.
Now, hedge funds are primary buyers, exploiting mispriced options for 'gamma farming'.

INSIGHT

Convertible Notes in TradFi

Convertible notes are a common funding mechanism in traditional finance, not a complex derivative.
Saylor's innovation lies in applying this tool to the cryptocurrency market.

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Clouted, Napenjoyoor, and EconDegen are all Founding Contributors at ETH Strategy.

In this episode, we break down Michael Saylor’s legendary BTC strategy, how MicroStrategy has leveraged convertible debt to accumulate Bitcoin, and why it’s been so effective. Then, we explore how The STRAT Protocol is bringing this playbook onchain for ETH, using an autonomous ETH treasury and long-dated convertible debt to create a DeFi-native version of the trade--plus what it means for ETH holders and how to get involved!

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🔗 Essential Show Links 🔗

► Newsletter: https://the-edge.xyz
► Youtube: https://youtube.com/@DeFiDad
► Apple: https://tinyurl.com/edgepod
► Spotify: https://tinyurl.com/edgepodspotify
► Linktree: https://linktr.ee/edge_pod
► Follow DeFi Dad: https://x.com/DeFi_Dad
► Follow Nomatic: https://x.com/Nomaticcap
► Learn DeFi: http://defidad.com/

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Timestamps

0:00 - Intro
5:15 - Team background
10:14 - What is ETH Strategy?
12:54 - How Saylors MSTR-BTC trade works
18:44 - Who is buying Saylor’s convertible notes?
24:43 - Why does anyone provide Saylor cheap debt?
31:45 - How are MSTR shareholders affected and what if BTC goes down?
38:09 - Is Saylor’s MSTR trade pumping the price of BTC?
41:13 - Sponsor mid-roll
41:51 - Will ETH Strategy improve the MSTR trade with DeFi?
43:42 - How ETH Strategy differs from Microstrategy
50:10 - DeFi native influence on ETH Strategy
53:38 - What’s the worst that could happen for STRAT holders?
57:18 - Sponsor mid-roll
58:57 - Who’s the target user for ETH Strategy?
1:00:54 - STRAT tokenomics and how raised ETH gets used
1:05:29 - Goals for presale
1:08:06 - Would ETH Strategy ever build this for BTC onchain?
1:12:24 - Closing

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🔗 Guest Links 🔗

► ETH Strategy website: https://www.ethstrat.xyz/
► ETH Strategy on X: https://x.com/eth_strategy
► Clouted on X: https://x.com/cloutedmind
► Nap on X: https://x.com/iamnapenjoyoor
► Econ on X: https://x.com/econdegen

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If you're a DeFi/Web3 builder, contact our team at: https://fourthrevolution.capital/

All opinions expressed by hosts and podcast guests are solely their own opinions and not necessarily those of Fourth Revolution Capital. Podcast guests and 4RC may have positions in the assets or other matters discussed in this podcast. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Do your own research. This is not a recommendation or endorsement to buy any token(s) related to any platform(s) discussed.