Strive Inc. (ASST) CEO Matt Cole made a bold statement on Thursday, asserting that Bitcoin (BTC) could plummet to a penny and the company would still survive due to its debt-free structure. Cole explained that Strive raises funds exclusively through preferred stock, eliminating any liquidation risk. He contrasted this with traders who borrow against Bitcoin, facing liquidation during sharp price drops. Strive offers two securities: Variable Rate Series A Perpetual Preferred Stock (SATA), paying a variable 13% dividend rising to 13.25% in December, and Series A Perpetual SATS Preferred Stock (SATS), paying 15%.
Cole revealed that Strive prepared for an 80% drop in Bitcoin's price by maintaining 85% to 90% of its balance sheet in Bitcoin and 10% to 15% in cash. This strategy allows the company to weather historical bear markets without selling any Bitcoin. He even suggested the approach might be overly cautious, as selling a small percentage of holdings would still pose minimal risk. In June, Cole had similarly argued that Strive could sustain dividend payments through a bear market using cash reserves.
The company's structure is essentially a long-term bet against the U.S. dollar. Strive sells perpetual preferred stock with dividends that have no end date, positioning itself as perpetually short the dollar. For common shareholders to benefit, Bitcoin must appreciate faster than the dividend rates of SATA and SATS. Currently, Strive holds 43,153 BTC bought at an average cost of $87,821 per coin, with Bitcoin trading near $67,018, about 24% below Strive's average purchase price.
Retail sentiment around ASST remains bearish on Stocktwits, with low chatter levels. Meanwhile, Bitcoin sentiment is extremely bearish, with high chatter levels.