Sachin

Macro Addict | Investor | Bitcoin | Equity | Bonds | Gold | Financial Independence |

[Sachin @bitcoin__asset]

@DrSJaishankar Haha

[K A L E O @CryptoKaleo]

Strategy's $STRC problem:

Saylor has used the issuance of STRC to fund billions of dollars of Bitcoin purchases for the better part of the last year.

The pitch?

STRC sits above common shares with a $100 stated liquidation preference and have an attractive dividend of 11.5%, which gets bumped up gradually when the shares are trading below $99 avg.

It naturally incentivizes buyers because the liquidation preference is economically supported by Strategy's ~844K Bitcoin on the balance sheet after debt and senior preferred claims, and the effective yield rises as the STRC price falls (e.g. at $92 STRC the effective yield is 12.5%).

So, what's the problem?

Their total debt + preferred senior to common claims are roughly ~$22.2B. Most of which isn't a problem ~currently~ (but there are billions of dollars worth of notes that become puttable in 2027-2028... and if MSTR is below conversion economics or refinancing markets are closed, those become hard cash obligations).

Their preferred dividends are currently ~$1.7B annually. And they only have ~$900M cash on hand... so the runway math doesn't look great.

So where does the money come from?

The yield has to come from somewhere.

Their revenue from the software company alone is only ~$500M/yr. That doesn't come anywhere close to what's needed.

They realistically have two options for raising capital:

1) Sell more MSTR...

They currently have ~$26B common ATM capacity available to them, but the issue is they're currently trading at an mNAV well below 1 already. Tapping into this is incredibly dilutive for common shareholders.

2) Sell more Bitcoin...

Saylor already effectively broke the trust he's established for years to "Never sell Bitcoin" when he made a 32 BTC sale last week.

The sale was tiny, but it gave the market a concrete reason to price the possibility of future BTC sales.

But the primary purpose of STRC is to raise more capital to buy more Bitcoin, right?

So in order to buy more Bitcoin, they have to sell Bitcoin.

But we saw what the market did after a small 32 BTC sale. BTC took a massive hit in anticipation that there could be more sales... The machine is breaking.

Strategy can defer dividend payments though if they want, right?

Yes, but unpaid STRC dividends accumulate and then compound monthly. So this isn't a long-term viable option. Deferring STRC dividends preserves cash, but turns STRC from a cash-yield product into distressed preferred equity.

And if the payments aren't being made to STRC, will any investor have confidence to buy it at a discount?

And if STRC is carrying a massive discount, it effectively eliminates it as an option for Strategy to use to continue funding new BTC purchases...

e.g. if STRC is $70, they'd be selling $100 of future liabilities for $70 of current credit. Not a great trade.

Reminder that STRC's $100 is not a redemption peg. Holders cannot simply demand $100 back in normal conditions. The price is maintained by confidence, yield support and Strategy's desire to preserve the funding channel.

If this dynamic persists, the largest corporate buyer of Bitcoin could shift from accumulating to liquidity management via selling or make the common shareholders of MSTR carry the burden by diluting them substantially (for as long as that can last).

I could see this collapse happening fairly swiftly.

It doesn't mean that MSTR necessarily dies off or is forced to immediately sell all of their Bitcoin (that door could be opened early though with something like a change of control of the company, delisting, etc.)...

Not sure what the solution is, but one thing is certain:

I would not want to be holding $MSTR right now.

The risk is not that STRC instantly becomes worthless. The risk is that once STRC trades like distressed preferred equity, Strategy loses a major funding channel while its dividend burden and note put wall remain.

The flywheel effect and the fear from what we've seen with previous major collapses (e.g. Luna / UST, FTX, 10/10, etc.) could lead to something similar here.

This doesn't mean I'm bearish on Bitcoin. I actually think it'll create an insane buying opportunity.

MSTR isn't Bitcoin.

If it does fail, plenty of people will try to claim BTC failed along with it. We've seen it happen plenty of times with plenty of other names. Every time the people digging Bitcoin's grave were wrong. This time isn't any different.

[Glenn Cameron @GlennOnrampBTC]

Show me a money market fund that does this

Or a savings account

$SATA trading at $92.60

And before the fanboys start with the Orwellian double speak "Saylor never said that", "Matt Cole never said that"

Let's review the evidence:

Strive CEO Matt Cole, in a March 11 2026 press release: “Instead of holding idle cash earning low yields in money market funds... allocate a portion of those reserves to instruments like STRC that provide strong yield dynamics while maintaining stable price behavior.”

Cole, via the Bitcoin Treasuries account:

“STRC & SATA are extremely credit-worthy instruments.” (it's unrated equity actually)

Strive’s CRO Jeff Walton: STRC is “a high-quality credit instrument... clear advantages over traditional fixed income.” (it's unrated equity actually)

Strategy markets STRC as a “synthetic stablecoin with yield,” and Saylor has compared it to a “high yield bank account.”

One last thing on Strive, then onto Saylor. Strive’s own “reserve” backing SATA partly consists of STRC, a competitor’s identical instrument. So the buffer meant to protect SATA holders is itself exposed to the same risk. They are not independent. They rise and fall together.

Michael Saylor, Bloomberg interview (on camera), 29 September 2025: “Everybody in the world would love to have a high yield bank account that yielded 10% or more, or they’d love to have a money market that gave them double or triple their normal money market.”

Michael Saylor, from a stage in Dubai, February 2026: “When designing STRC, our goal was to create a high-yield bank account-style product.”

Michael Saylor, repeated claim, February 2026: “Our goal is to provide you with a bank account that pays you 10% instead of your bank that pays you 4 or 3 or 2 or 0. That’s what STRC is.”

Michael Saylor, in an AI-generated “Spinal Tap” ad, after calculating STRC’s tax-equivalent yield by state of residence, February 2026: “We created a bank account that pays 17-20% by combining digital capital with a digital credit instrument with a digital treasury company that issues securities to pay the dividend.”

Yes I know the one above is difficult to believe because of the 17-20%, but go have a look, he actually said that

Michael Saylor, February 2026: “How many people want a money market that pays them 10% instead of 4%? A lot of people want that.”

Michael Saylor, on the record, February 2026: “You can see the idea of this is a high-yield savings account that just pays twice your normal savings account if you understand and if you believe in bitcoin.”

Michael Saylor, February 2026: “There’s $18 trillion of bank accounts.”

Now the reality, from the prospectuses and filings:

These are unrated, sub-investment-grade, junior, perpetual preferred shares. No maturity. No right to redeem. You cannot demand your $100 back, you can only sell at market.

Both have traded below their $100 par for a large part of their lives. STRC and SATA have traded around $88 to 98, not $100.

The dividends are discretionary, declared at the board’s choice.

Holders have no claim on the Bitcoin. It is not ring-fenced or pledged. The “coverage” and “overcollateralised” figures are marketing ratios, not liens.

Both are issued by companies with negative operating income.

A money market fund redeems at $1. A bank account is insured and returns your principal. SATA and STRC do neither. They are daily-fluctuating, unsecured, junior equity on the most volatile major asset, sold with the vocabulary of savings.

[Gss🇮🇳 @Gss_Views]

Former Finance Secretary Subhash Chandra Garg exposing the reality behind India's GDP growth numbers !!

- India's real GDP growth in last 10 years is only 6-6.5%

- In real dollar terms, even USA is growing with 6-6.5%, which is not being told by people

[Sachin @bitcoin__asset]

@coinbase Be careful.

[Sachin @bitcoin__asset]

@KushaalPatel But now you cant withdraw crypto on chain to any wallet like metamask etc.

[Moneycontrol @moneycontrolcom]

🚨 “RBI needs to correct its mistake,” says Ajay Srivastav, expects a rate hike from the Governor

Watch the full video here⏬| #RBI @SurabhiUpadhyay
https://t.co/HsSvovmX8L

[Vanshika✨ @vanshuETH]

hate to break it to you

coinbase just launched in india

direct inr rails, institutional execution with lowest fees thats nice

but the moment you link your indian bank account

sending crypto gets disabled, permanently

> can’t send to your own wallet
> can’t send to a friend
> can’t send to any exchange
> ever

crypto’s most basic principle is that you can send it to anyone anywhere in the world without permission

good luck with that on coinbase

[Vikas Vij @TheClubJunto]

SIP Stoppage Ratio Breaches 100%

1. “SIPs Discontinued” exceed “New SIPs Registered” in Mar/Apr

2. A prolonged flat-to-negative Time Correction can exhaust SIP investor patience

3. Unique MF Investor additions hit 3-yr low

4. SIP is the single load-bearing pillar

RISK WATCH:

Early Sign of SIP Fatigue

a. For the first time in 11 months, SIP stoppage ratio crossed 100% in both March and April 2026.

MARCH:
SIPs Discontinued: 53.38L
New SIPs Registered: 52.82L
SIP Stoppage Ratio: 101.06%

APRIL:
SIPs Discontinued: 51.29L
New SIPs Registered: 50.71L
SIP Stoppage Ratio: 101.1%

Before this, the SIP Stoppage Ratio was in the range of 75% for a whole year. So, about 15 to 20 lakh net SIP additions were happening every month.

b. In April 2026, less than 3 lakh new unique investors entered the MF industry (both debt & equity combined). The average run rate for the last 3 years was 5 to 10 lakh additions per month. April number has hit a 3-year low.

c. These figures may indicate an early sign of exhaustion in New Retail Momentum. But importantly, net equity inflows via SIP and lump-sum MF investments have remained resilient till now.

This means: Some small new SIP investors are pulling out after a prolonged phase of zero to negative returns. But seasoned, high-ticket investors are not worried. They are buying the dip in the belief that this market correction is temporary.

Risks to Consider

RISK # 1

SIP investor in India does not need a massive 30% overnight market crash to stop SIP. A simple, boring, flat-to-negative 18-to-24 month time correction may be psychologically sufficient to exhaust his patience.

The most risky group is the young SIP investors who entered the market during the post-Covid secular bull run. They were sold SIP plans on the narrative of 12% to 15% annualized returns.

This group’s tolerance of zero to negative returns may break at some point. Unlike long-term investors, their portfolios don’t have a cushion of past compounded profits.

They have to add fresh capital every month, and it causes heavy psychological fatigue when they see zero returns, while someone who is invested in FDs is doing better than them.

RISK # 2

In investing, you must assume the worst-case scenarios and then decide your investing strategy, rather than assuming best-case scenarios.

Assume that persistent inflationary conditions or continued rupee depreciation or Balance of Payments deficit forces the RBI to increase interest rates at some point.

The moment FD rates go to 7.5% or 8%, while SIPs continue to deliver zero returns, the same retail investors who mass-migrated from FDs to MFs post-Covid (because MFs promised dream returns) – may migrate back to safe havens.

Risk-Adjust Your Portfolio

The real risk to Indian equities is non-linear. Think of the market as a single-engine aircraft solely dependent on SIP flows, and not earnings growth.

If the SIP stoppage ratio escalates and monthly inflows fall from ₹30,000 crore to ₹20,000 crore, domestic fund managers may no longer have the ability to absorb FII selling.

That is when liquidity disappears, and forced equity selling begins to meet redemption pressure.

For retail investors, a risk-adjusted strategy in these times might be:

30% FDs
20% Gold
30% Indian MFs
20% S&P 500 ETF

ENDPIECE: Respect Risk

Legendary investor Howard Marks tells the story of a gambler who always lost money in the race course. One day the gambler hears about a race with only one horse in it. He sells his house and bets the entire money on the horse.

Halfway through the race, the horse jumps over the fence and runs away.

@arabicatrader

[Sachin @bitcoin__asset]

@RonSwanonson CAGR of btc in last 5 years is under 5%. BTC is now of the biggest underperforming asset

[Sunil Gurjar, CFTe @sunilgurjar01]

Never Miss this 4 minute Masterclass how to research stocks.

Bookmark it
See it when you are free and fresh.

[Sachin @bitcoin__asset]

@_InfoGram_ @grok verify this

[Shankar Sharma @1shankarsharma]

Will a Mutual Fund CEO now accept that ( she derisively called my screen shot article " click bait" then ) what I wrote 16 months ago about SIP flows providing easy exit liquidity to F2s, and thereby, creating a macro disaster - was correct and prescient?

We are now Fragile One, in a full blown FX crisis, primarily because of this , et al.

Ab to, even a broker is saying exactly the same thing, now.

It's perfectly okay to disagree with a perspective. But being derisive about it BECAUSE of your own enlightened self interest over the nation 's interest...

( BTW, I don't give a r@# s a#&s whether SIPs increase or decrease. I gain or lose nothing from it. I just analyse and predict based on what the tea leaves show me. Apna koi swaarth nahi)

[Sachin @bitcoin__asset]

@ActusDei Mine😁

[Sachin @bitcoin__asset]

@IBKR I opened account..and trust me your system is pathetic..worst app performance..overall you are one of the worst exchange where i opened account and i regret this decision

[Sachin @bitcoin__asset]

@MebFaber @ProfSteveKeen True. Spending a little time understanding the economy is useful.
* Spending too much time trying to forecast GDP, interest rates, inflation, recessions, elections, etc. usually does not improve investing results.

[Fred Krueger @dotkrueger]

Bitcoin does nothing most of the time. Once or twice a year it moves in 10 day spurts delivering massive returns.

I can't tell you when the next one is coming, but I can tell you it will come and it will be fast.

[Sachin @bitcoin__asset]

@MehHarshil @grok

[Harsh Goenka @hvgoenka]

Marketing techniques through word of mouth 😀

[Sachin @bitcoin__asset]

@Vedhika4u Save Dogs from Dog lovers