A storm of “Bitcoin treasury companies” is growing in the financial world. Matt Cole, CEO of Strive, who was a guest on “The Wolf Of All Streets” podcast, argued that a new generation of financial products based on crypto assets, particularly the “digital credit” market, will fundamentally change the global financial system.
Cole suggests that at least 1% of the massive $300 trillion global credit market will transform into digital credit, indicating the emergence of a brand new $3 trillion market in this area. This figure points to a potential even greater than Bitcoin’s current market capitalization.
According to the analyst, “digital lending” formulas are emerging for institutional companies and individual investors who are wary of Bitcoin’s extreme volatility but are seeking high returns. Evaluating products such as Strive’s “SATA” and MicroStrategy’s “Stretch,” Cole said these instruments proved their worth in the last bear market.
“When Bitcoin lost more than 50% of its value, SATA and Stretch only experienced a drop of around 10% and quickly recovered to their previous values before Bitcoin had even fully bottomed out. This proves that these products provide double-digit dividend/interest yields (11%-13%) with significantly less risk than Bitcoin.”
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Cole stated that while there was a craze last year for “starting Bitcoin treasury companies,” many lacked a real strategy or expert team, and that a wave of consolidation (mergers and acquisitions) in the market is inevitable.
“Even during a mild Bitcoin winter, we saw many companies selling their Bitcoin holdings. This shows they lack long-term belief. True believers are becoming separated from those who want to get rich quick. In the future, we will see activist investors buying these weak companies.”
In the interview, Cole also shared his story of becoming a Bitcoin maximalist, explaining that in the past he managed a multi-billion dollar portfolio of US government bonds (including $70 billion in bond management within CalPERS) and that during that time he had direct contact with officials from the FED and the US Treasury Department.
“Between 2011 and 2016, I was also a Bitcoin skeptic. But I saw with my own eyes that they were lying when they said they weren’t printing money or monetizing debt. They were just manipulating the system by putting Wall Street banks in between. When I realized that this debt crisis wouldn’t end, I invested all my wealth in Bitcoin at the end of 2016.”
*This is not investment advice.
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