Bitcoin treasuries may struggle to match Strategy, says Ammous

Bitcoin treasury companies built primarily around buying the cryptocurrency may struggle to compete with Michael Saylor’s Strategy, according to economist and “The Bitcoin Standard” author Saifedean Ammous.

“I don’t see a compelling case for going to another Bitcoin treasury company other than Michael Saylor’s Strategy,” Ammous said on the latest episode of Cointelegraph’s Proof of Thesis.

Strategy holds the world’s largest corporate Bitcoin treasury, with 847,666 BTC acquired for $63.95 billion, according to its Monday 8-K filing. The company also reported a $5.02 billion US dollar reserve to cover preferred stock dividends and debt interest.

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Strategy’s size and cash reserves

Strategy’s larger Bitcoin holdings allow it to borrow at lower rates, giving it an advantage over smaller treasury companies, according to Ammous. He said previous drawdowns had not brought the company close to liquidation.

Strategy’s financing model came under the microscope over the summer as Bitcoin fell below $60,000 and the company’s STRC preferred stock traded far below its target price of $100.

Strategy raised STRC’s annual dividend rate to 12%, repurchased shares and built its cash reserve. It also sold some Bitcoin to help fund dividends and STRC repurchases before resuming its Bitcoin accumulation.