Bitcoin has dropped roughly $10,000 since $SATS started trading last month. The fact that this fixed-rate preferred remains well above its IPO price suggests that distribution is reaching investors who specifically seek high yield and are not motivated to sell merely to purchase Bitcoin at the now-lower price. It's working.

Welcome Back To The Hurdle Rate Episode 81: Why Your Savings Keep Shrinking In this week’s Hurdle Rate, the crew breaks down a whipsaw week, record AI capital raising, and why the $BTC to gold chart still looks bullish. They also discuss escaping the fiat mindset, the Bitcoin S-curve, Paraguay’s bank run, and how Digital Credit like $SATA and $SATS stacks up against the S&P 500. Here’s the latest with @ColeMacro, @PunterJeff, @Werkman, and @TimKotzman. Timestamps: 00:00 - Intro 01:21 - A Whipsaw Week For Markets 04:22 - Confusion Has Never Been Higher 07:55 - Everyone Needs Capital 10:55 - Escaping The Fiat Mindset 20:27 - The Paraguay Bank Run 25:28 - Valuing The Future, Not Today 28:04 - Built For Institutional Mandates 32:07 - Digital Credit Vs. The S&P 36:25 - The Thanksgiving Pitch 45:05 - Rethinking Bitcoin Yield 52:51 - Art Over Algorithms

There has been a lot of discussion online recently about the importance, or lack of importance, of Bitcoin per Share and BTC Yield (growth in BTC per Share). I want to take a few minutes to share my perspective here. Trigger Warning: Long Post BTC Yield is a critical metric, and there is a reason it is front and center for the companies operating in this space. When you look at a company and its management team, you need to ask yourself what metrics are in place to guide their actions day to day. The metrics established are called KPIs, or Key Performance Indicators. These metrics are intentionally selected because management has the ability to influence the outcome. It takes some of the unknowns out of the equation, BTC price for instance, and focuses the efforts of a management team on taking the best actions they can at this precise moment to drive long-term value for their shareholders. So why is BTC Yield so important? To answer this, let’s not just talk philosophically about exposure to BTC. Let’s think through some of the actual activities tied to managing these companies (can’t cover all of them, but you’ll get the point). For starters, let’s focus on common equity. What actions can a management team take to drive BTC Yield? The first, and most understood, would be issuing common equity when the market cap of the common equity is valued higher than the fair market value of the Bitcoin on the balance sheet. When this happens, the common equity is trading at a premium to the BTC value. If you raise capital at those levels and deploy that capital 100% into BTC, you capture that premium as an increase in BTC per Share. That increase results in a positive BTC Yield. The higher the premium, the more significant the yield is.  This focuses management attention on fostering expanding multiples when possible and ensuring their activities don’t stifle growth by being too aggressive. The impact of this transaction is immediate. You are increasing BTC per Share while also increasing the asset value supporting each share. You are building a higher base value from which future returns can compound. This is critical. The next activity that can generate positive BTC Yield is buying back common equity. This one has more nuance, but let’s start simple. Assume a company has excess cash on the balance sheet and decides to buy back stock, taking into account no other factors. Would this generate positive BTC Yield? Yes. The company would have the same amount of BTC and fewer shares outstanding. However, assets would also be leaving the treasury in the form of cash. So while BTC per Share increases, you are not building the asset base in the same way you are when issuing common equity at a premium and bringing incremental capital onto the balance sheet. Could it still be the right decision? Certainly. But, as with all things, there is nuance. The main thing that needs to be understood with buybacks is that the capital has to come from somewhere. It could come from cash balances, Bitcoin sales, capital raised through other securities, debt facilities, or somewhere else entirely. Each choice has trade-offs. Cash balances are simple, but they deplete your cash runway. Selling Bitcoin is simple, but whether the transaction is accretive (and how accretive it is) to BTC Yield depends on where the common equity is trading relative to the fair market value of the BTC being sold. Using capital raised from other securities could also make sense, but then you have to consider that you now have multiple groups of shareholders with different interests. So how do you balance that? Take the issuance of digital credit, for example. Could a company simply take some of the proceeds from a preferred issuance and continuously funnel that capital into common stock buybacks? Sure. But that likely is not sustainable over the long term, and it does not fit the broader mandate of driving long-term value across the capital structure. It would be eroding the treasury asset coverage of the dividends by taking on more obligations but adding fewer assets to the balance sheet. You can see how that would impact credit quality over time. Credit investors want to know that the balance sheet supporting their dividends is strong. If you consistently funnel capital raised from credit investors into common stock buybacks, you may be creating value for the common while simultaneously reducing value for the credit investors. So who gets prioritized? You cannot be algorithmic here, because doing so effectively tells one group of investors that you will always act against their interests. You need to strike a balance. That is the nuance. And I do not think it is widely understood or appreciated in daily discourse. Management teams are constantly seeking the right balance to keep the value proposition strong for all shareholders and to keep the engine running optimally, valuing both common and preferred. So back to why BTC Yield is important. BTC Yield guides the daily actions and decisions that drive the long term result. When looking at BTC Yield in a dual-security model, you have to understand that there are two components that can drive value over the long term. The first is what we have already discussed, consistently building the asset value behind the common shares. This is the base that all future returns build from. Using BTC Yield as a guiding KPI helps keep common stock issuance aligned with the objective of building that value over time. If the Yield is negative, you are moving backward on a BTC per Share basis. If it is neutral, you are scaling without building immediate foundational value (many times scaling is important and may be the right decision in a neutral manner). If it is slightly positive, you are building that base, but at a slower pace. And if the premium is significant, you can accelerate that value delivery through issuing fewer shares for the assets acquired. It is a sliding scale. Managing the capital markets well, and utilizing strong data and analytics, helps teams identify the right moments to accelerate and the right moments to show restraint with a focus on the long term. Once you have considered how to build the foundation and consistently move it higher, you then have to consider how to generate excess returns on top of that foundation. That is where Amplification comes in. The issuance of digital credit products can also increase BTC Yield when the proceeds are used to acquire BTC, because you are adding Bitcoin without issuing common shares. But the capital is not free. You are introducing dividend obligations and a cost of capital, which means the BTC Yield generated from that transaction has to be considered alongside the obligations created to produce it. That is where the second value driver comes in. Amplification. First, you build a growing asset base per share. Then you amplify that base to capture excess returns when Bitcoin’s performance outpaces the cost of capital. One creates immediate value through the premium capture in the transaction. The other creates deferred value that is realized as the underlying asset performs relative to the cost of the capital used to acquire it. One builds today, the other delivers the long term value creation. When it works, it can be extremely powerful. It is the combination of these two things that creates the value proposition for structured finance companies capitalized on Bitcoin. But throughout this journey, you have to remain focused on balance. There is no single right answer at all times. The correct decision is nuanced and changes with the markets each and every day. Management teams have to constantly evaluate the right execution path to position the company for maximum value delivery over time. Taking short-term actions, or reacting emotionally to market sentiment, can alter that positioning and miss maximal value capture as the thesis ultimately plays out. Long-term thinking outperforms short term reactions. And, as with all things, it is critical that you consider all shareholders and protect their interests. If a company were to be aggressive with the common ATM when it does not deliver value, common shareholders may not be pleased and seek to move capital elsewhere. If you focus only on simple short term ways to drive value for the common equity, that capital is likely being pulled from somewhere else, potentially creating credit-negative actions that preferred investors may not like. Digital credit is the engine that drives amplification, capital feeling mistreated and leaving lessens the ability to deliver on the amplification mandate. If you abuse any portion of your capital structure, liquidity can eventually be put in jeopardy. It goes back to the old saying, “Capital flows to where it is treated best.” That should be the goal of these teams. Create the best long-term value delivery environment for capital, and make capital want to remain inside your ecosystem. BTC Yield helps guide the right actions. It focuses execution, encourages strategic rather than reactive decision-making, and helps management understand whether the capital allocation decisions being made are enhancing or detracting from the overall vision. But BTC Yield does not exist in isolation. Liquidity matters. Risk management matters. The obligations created across the capital structure matter. And the interests of every class of shareholder matter. The job of management is to balance all of those things together. Build the base. Amplify it intelligently. Protect the capital structure. Preserve liquidity. Be bold. And make decisions that position the company to deliver maximum value over the long term. Build a vision. Set the right KPIs. Align incentives. Execute efficiently. Minimize value leakage along the path to total returns. Deliver for your shareholders.

Calling all RIAs, Family Offices, Emerging Managers: Your clients are going to ask about $STRC, $SATA and $SATS. "I don't know" is not a strategy. Read the free primer -> The Digital Credit Report

Bitcoin is the hurdle rate at Strive. We believe our Bitcoin Yield is the primary driver of $ASST outperformance over $BTC this year. Now with both $SATA and $SATS, Strive has never been better positioned to deliver long-term returns above Bitcoin for our common shareholders.

DIVIDEND SEASON FOR $SATS BEGINS TODAY - Investors who own $SATS by market close today receive *ALL* accrued dividends since its IPO - Daily dividends begin every business day thereafter - $SATS pays a perpetual fixed-rate effective yield north of 15% when purchased under $100

Our capital markets decisions are driven by what we believe will maximize our *long-run* total returns. We have been consistent that we believe the most powerful and sustainable engine to power total returns in excess of Bitcoin is our amplification ratio. We've built a leading amplification ratio today at over 60%, but maximizing our amplification ratio over the long-run requires continuing to support our Digital Credit products. Demonstrating continued access to capital markets during drawdowns and slower periods has been provably helpful in building a track record of success for the credit strength embedded in those instruments. I expect the importance of this track record, specifically how Strive executed during this bear market, to increase in the coming years. I respectfully disagree that a "honeymoon" period is over for Strive as I believe we've only now built an amplification engine that has a durable moat along with no PIPE warrants remaining. I don't think most investors even understand the value of our amplification engine yet, which makes sense as amplification is designed to generate returns when Bitcoin moves up, and its been largely flat this year. When Bitcoin slows down, our base case is patience, and we've demonstrated that several times during this past year, but we've also demonstrated we're always ready to take bold actions on a moments notice. Less macro than the above, but we think $SATA has continued to trade very strong with strong demand. Even with the significant spike in $SATA short interest reported on 10/15, which was shortly after the announcement of $SATS, $SATA remains not much below $99, without a single dollar of buybacks. There are index rebalances coming up which should put in some decent size orders for $SATA. We've generally leaned towards increasing the interest rate over buybacks, but have also demonstrated multiple times that patience (doing nothing) can do the trick as well, as these are very attractive products. Lastly, there is an interesting, but large divergence in the viewpoint among many retail investors vs institutional shareholders in terms of common equity ATM usage. The institutions overwhelmingly want more common equity ATM usage with any premium, many retail investors want less or none. Our view has consistenly been in the middle, and I believe taking the extreme on either side would raise our overall cost of capital. We recently explained this to several of our large institutional shareholders asking for more common equity ATM usage during the $SATS IPO, and I want to offer the same to the retail investors asking for the opposite. During the last bull market, the vast majority of excess returns for MSTR over Bitcoin were driven by accretive common equity issuance. We've been consistent in our belief that it wasn't a sustainable model because there was no amplification engine, but also believe it was the rational decision at the time, as a high mNAV without amplification wouldn't have been sustainable either. The ideal scenario has always been having an amplification engine that has scarcity and sustainable growth while also being able to issue common equity accretively. Importantly, accretive common equity issuance isn't a requirement, as the amplification drives the majority of returns, unlike the last bull market, but it's a potential return amplifier. What this means in practice is likely less relative common equity ATM issuance than what investors saw MSTR do during the last bull market. That said, it will probably be more common equity issuance than some retail investors would want, and less than many institutional investors want, driven by what we believe will maximize total returns based on all of the data and information we have access to.

Abundance from Super Intelligence will create exponential value for scarce assets. Bitcoin will be the most valuable scarce asset. The optimal play: learn & use Super Intelligence & buy Bitcoin. Ignore FUD from those who've been consistenly wrong.

Strive acquired 6,182 $BTC for $511.4M at an average cost of $82,732 per bitcoin, bringing total holdings to ₿43,000. - Cash and marketable securities increased by $187.7M to $554.6M. - Established a $1B $SATS ATM program. $ASST $SATA $SATS