Ammous Warns Corporate Treasuries May Lag Behind Strategy

Economist Saifedean Ammous believes that Bitcoin treasury companies, which accumulate and hold the cryptocurrency, will struggle to compete with Strategy, a corporate vehicle led by Michael Saylor. In an episode of Cointelegraph's Proof of Thesis, Ammous pointed out that Strategy has significant advantages in financing, dividend coverage, and resilience during drawdowns due to its size and cash reserves.

Strategy boasts 847,666 BTC acquired for $63.95 billion, alongside a $5.02 billion US dollar reserve tied to preferred stock dividends and debt interest. Ammous sees this as a decisive edge over smaller Bitcoin treasury companies during periods of large declines in the asset's price.

Ammous expects more businesses to adopt the practice of placing surplus cash into Bitcoin, but warned that holding it indirectly through Strategy carries risks. He also cautioned investors about the potential for another crash and suggested that Bitcoin's next cycle may peak in 2029, with prices largely rising leading up to that point.

Ammous emphasized that past drawdowns have not brought Strategy close to liquidation, which is an important distinction for investors who care about survivability as much as ultimate upside. He also highlighted the company's financing structure and its ability to meet payment obligations even after significant market drawdowns.