ColeMacro said long-term Bitcoin gains and a cash reserve could help Strive sustain its 13% and 15% preferred-share dividends through downturns.
In an interview posted on Anthony Pompliano’s X account Nov. 13, ColeMacro said Strive intends to put 85%-90% of its assets into Bitcoin (BTC) and retain 10%-15% in cash. He said the reserve is meant to help the company withstand an 80% decline in Bitcoin without selling Bitcoin.
ColeMacro described a structure in which proceeds from preferred-share sales would go toward Bitcoin purchases. Preferred investors would receive dividends ahead of common shareholders, who would have an interest in value left after those payments, he said. For common shareholders to benefit, Bitcoin would need to appreciate by more than the applicable preferred yield on average: 13% for one offering and 15% for the other.
ColeMacro estimated annual currency debasement at 7%-8% and argued that Bitcoin gains around that level could sustain dividends over the long term. Under that scenario, he said, preferred investors could receive effectively all Bitcoin-related returns, leaving common shareholders with none.
He said the fixed-rate offering followed investor concerns that the variable rate could fall to 7%-8% in three to five years if views of Strive’s credit risk improved. ColeMacro estimated fixed-rate securities account for 93% of the bond market and expected the fixed-rate preferred shares to draw more demand than variable-rate products.
ColeMacro said the shares’ long duration leaves investors exposed to Bitcoin’s price swings. He estimated wealthy individual investors made up about 70% of buyers. Institutional investors, he said, had asked for familiar structures with defined terms and maturities that would let the issuer avoid taking on debt; those requests could shape future products.
Strive announced it closed its Oct. 20 sale of 15.00% Series A Perpetual SATS Preferred Stock, bringing in about $630 million in gross proceeds. EconoTimes previously covered the sale’s close.
