Bitcoin treasury firms may struggle to match Strategy, Saifedean Ammous says
In brief
- Saifedean Ammous said treasury firms built mainly on buying Bitcoin may struggle to compete with Strategy.
- Strategy holds 847,666 BTC acquired for $63.95 billion, per its Monday 8-K filing.
- Strategy reported a $5.02 billion USD reserve for preferred dividends and debt interest.
- Ammous cautioned that investing in Strategy carries risks and said he prefers holding Bitcoin directly.
Scale and a $5.02 billion cushion
Strategy holds the world's largest corporate Bitcoin treasury. According to its Monday 8-K filing, as cited by Cointelegraph, the company held 847,666 BTC acquired for $63.95 billion and reported a $5.02 billion US dollar reserve to cover preferred stock dividends and debt interest.
That cash matters to Ammous's argument. He said previous drawdowns hadn't brought Strategy close to liquidation.
“Even a much bigger Bitcoin drawdown is going to leave them in a decent situation because they have enough cash on hand to make their payments,” Ammous said.
His comments come after a rough summer for the model. Strategy's financing drew scrutiny as Bitcoin fell below $60,000 and its STRC preferred stock traded far below its $100 target price. The company 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 accumulation).
Bitcoin as a corporate reserve
Ammous didn't limit the idea to Strategy. He said businesses with positive cash flow can put surplus cash into Bitcoin as a long-term reserve asset, and that he expects more companies to adopt the model. He drew a clear line between those reserves and the cash a business needs for daily, weekly and monthly operations.
Ammous also cautioned that investing in Strategy carries risks, and said he favors holding Bitcoin directly.
Ammous's price outlook
On the market, Ammous said Bitcoin has probably already bottomed, though he acknowledged another crash could still push prices lower. He said the next cycle may peak in 2029, with prices predominantly rising until then, and argued that smaller drawdowns could make Bitcoin more attractive to large asset managers as memories of previous bear markets fade.
His best guess for 2030? Roughly $200,000, according to Ammous, an estimate he based on the Bitcoin power-law model and placed near the lower end of the range he cited. It's his forecast, not Strategy's or anyone else's.
Frequently asked questions
Why does Saifedean Ammous think Strategy has an edge over other Bitcoin treasury companies?
Ammous said Strategy's larger Bitcoin holdings let it borrow at lower rates than smaller treasury companies. He also said previous drawdowns hadn't brought the company close to liquidation. Strategy reported a $5.02 billion US dollar reserve to cover preferred stock dividends and debt interest.
What did Strategy do after its STRC preferred stock fell below its target price?
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 Bitcoin accumulation.
