I know $strc can’t guarantee 9%, but it is trying to be %9 like a money market tries hard to give 4 right? Like if Bitcoin still cycles down 30%, Saylor is likely going to still pay out the $strc 9% barring other issues right?
In that way, if I am saving for an expense 2-3 years out… $strc is a good option?
I’m already allocated to $BTC and need less drawdown for this stored value at this time. Thank you.
#Bitcoin #MSTR #STRC #STRK #BitcoinFinance #Nostr #bitcoindollar
I assume this is “tongue in cheek” comment about $strc.
$strc seems like putting your money in a bank with thousands of others and leaving it there untouched while the bank has expenses greater than income which it funds from your money and others plus it pays you interest.
That’s a bad ending about to happen and one of the reasons the Strategy investor has Perpetuals with no maturity date - stops the bank run.
$STRC is not designed to guarantee the coupon rate, but to keep the face value constant. If they will succeed at doing this remains to be seen, so I would wait to see how it behaves during a drawdown before committing to it. Since your time horizon is 2–3 years, maybe you could wait a few months for the product to mature a bit. Volume and demand so far is promising, though.
If bitcoin experiences a 30% or more drawdown, I would expect the yield on STRC to go up. The market is currently not pricing the preferred STR’s solely on the basis of prevailing TradFi interest rates, but also as a function of BTC price and #MSTR sentiment and leverage. So if interest rates drop, the yield on #STRC may go down as well. The actual yield on STRC is likely to be way more volatile than money market funds.
The key point of STRC is to eliminate capital appreciation / depreciation due to interest rate risk. So minimising drawdown - this is the goal for STRC. With that, you forgo any capital gains as well.
I don’t agree with the comment about a bad ending waiting to happen or MSTR having expenses greater than income. If the CAGR of the bitcoin collateral is greater than the expense of servicing the preferred’s, that is a sound business model.
