‘We sell the credit, we buy the Bitcoin’: Saylor’s triple flywheel in his own words - AMBCrypto
Michael Saylor's Strategy has seen its common and preferred stock market capitalization reach $475 million, a 3,467% increase over the past year, with daily trading volume surpassing the entire traditional finance industry.
The blockchain-based tokens representing Strategy's securities have attracted substantial investment, with $204 million on Ethereum, $118 million on BNB Chain, and $80 million on Solana according to Token Terminal data. This surge comes as Strategy's daily trading volume has reached $2.90 billion, outpacing the entire traditional finance industry.
Triple Flywheel Strategy
Saylor attributes this momentum to a 'triple flywheel' effect driven by rising Bitcoin prices. He explains: 'We sell the credit. We buy the bitcoin. We drive up the price of the bitcoin. We drive up the premium in the common stock.'
We sell the credit. We buy the bitcoin. We drive up the price of the bitcoin. We drive up the premium in the common stock. We can issue the common stock. We can buy the bitcoin. As the bitcoin goes up, the reserves go up. The risk on the credit goes down. The credit spreads compress. We sell more credit. We buy more bitcoin.
Execs at Saturn Credit clarified Strategy's business model serves two groups: 'fixed income oriented credit investors' and 'Bitcoin maximalists that want to outperform Bitcoin and own amplified Bitcoin as MSTR.'
Market Performance
At press time, STRC was trading at $99.49 (up 0.32%) while MSTR stock reached $141.40 (up 1.13%). Bitcoin itself was trading at $81,447.23 after a 2% increase in the past 24 hours.
However, concerns remain as Strategy spent $888 million on preferred-stock buybacks compared to just $290 million on Bitcoin purchases between September 14 and October 18, reducing cash reserves from $1.3 billion to $447.3 million. Despite this, STRC remains 'the biggest and most liquid US perpetual preferred,' suggesting Strategy's Bitcoin accumulation strategy continues.
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