Strategy's Scale and Cash Holdings Give Bitcoin Treasury Firm an Edge
Bitcoin treasury firm Strategy, led by Michael Saylor, has an advantage over competitors due to its scale and cash holdings, according to economist Saifedean Ammous. Ammous, author of 'The Bitcoin Standard', finds it hard to justify choosing another firm over Strategy. He notes that Strategy's $63.95 billion in bitcoin holdings and $5.02 billion in dollar reserves give it a significant edge.
Strategy's funding model came under scrutiny this summer when the bitcoin price fell below $60,000. However, the firm has since raised the STRC preferred stock annual dividend rate to 12%, repurchased shares, and built up cash reserves. It sold some bitcoin to fund dividends and STRC buybacks, then resumed bitcoin purchases.
Ammous believes that Strategy has enough cash to meet its payment obligations even if the bitcoin price falls further. He also expects more companies to adopt the approach of allocating excess cash to bitcoin as a long-term reserve asset.
Regarding the bitcoin price, Ammous thinks it has likely already bottomed, but notes that further declines are still possible. He predicts the next cycle peak in 2029 and estimates a price of around $200,000 for 2030, although he wouldn't bet on that figure.