This is at same time correct and counterintuitive. Fred is right. Of course it's true that if the money raised via issuance of "digital credit" (it's no more digital than any other security and it isn't credit) goes into BTC, that is good for BTC, in the first instance. But people forget this: 1. "Digital credit" has nothing directly backing it and is perpetual. 2. It pays a very high interest rate which becomes a huge hurdle rate for the asset that is being bought, which has no coupon to offset any of it. 3. It will never trade above par, as all the new issuance is at par. This leads to an imbalance of risk/reward when the asset trades at or very near to par: you can make only the IR which you are promised and which is backed by nothing but words. This is a volatility creator, not a suppressor: as soon as BTC has some downside volatility, the "digital credit" falls heavily, just like STRC has done 4 times in its short existence. The last time it forced the issuer to sell BTC to raise cash and issue common to buy back the "digital credit". And this BTC selling will always be at the worst possible moment, because it is what caused the weakness in STRC in the first place. The MSTR common shareholder gets screwed either way and both ways. But what about the upside? Well, why would you settle for 12% if you think it will go up much more, when the volatility of the instrument does not compensate you during drawdowns? During bull runs you would much rather own BTC than STRC. It would make far more sense, imho, to issue BTC backed real bonds, with a fixed coupon and maturity. How would it work? Take a 1 year bond. You issue $XXxm, with a 10% coupon. You buy $XXm of BTC with it, which becomes the bond's asset backing. If at maturity BTC has appreciated more than the coupon, the difference belongs to the common shares. If it has gone down, the common shareholder loses. In both cases the volatility of the bond is likely to be minimal, unlike the volatility of the current preferreds.

Again, for the slow kids who believe the crap posted by crypto/doomer influencers: Treasury's buybacks of longer duration paper are NOT money creation. Only banks and the Fed can create money, the Treasury cannot. Not a single $1 is being created. What they are is a lowering of duration held by the private sector (assuming he does not increase the supply of similar length coupons at next QRA to fund the purchases, which he won't). Which, ceteris paribus, is an easing of financial conditions.