The Pomp Podcast - Why Is Bitcoin Digital Credit So Important? | Matt Cole

Episode Date: June 4, 2026

Matt Cole is the CEO of Strive Asset Management. In this conversation, we break down digital credit — what it is, how it works, and why it could be the most important asset in the transition from fiat to a bitcoin future. We discuss the mechanics of Strive's SATA product, dividend structures, Michael Saylor's decision to sell bitcoin, and why a thriving ecosystem of digital credit issuers is better for bitcoin long-term.====================Simple Mining makes Bitcoin mining simple and accessible for everyone. We offer a premium white glove hosting service, helping you maximize the profitability of Bitcoin mining. For more information on Simple Mining or to get started mining Bitcoin, visit https://www.simplemining.io/pomp====================Bitget (https://bitget.com/promotion/futures-tradfi?channelCode=regd&vipCode=nkew) is the world's largest Universal Exchange (UEX) (https://bitget.com/promotion/futures-tradfi?channelCode=regd&vipCode=nkew), serving over 125 million users with access to over 2M+ crypto tokens, and TradFi markets such as 100+ tokenized stocks, ETFs, commodities, FX and precious metal like Gold. At launch, users can trade 79 instruments with USDT directly with the App. Users can also enjoy high liquidity and low slippage, while trading these assets with up to 500x leverage. For more information on Bitget TradFi, visit this article (https://bitget.com/support/articles/12560603846859). For more information, visit: Website (https://bitget.com/) | Twitter (https://x.com/bitget) | Telegram (https://t.me/BitgetENOfficial) | LinkedIn (https://linkedin.com/company/bitget-global/) | Discord (https://discord.com/invite/bitget) For media inquiries, please contact: [e-mail]====================Arch Public is an agentic trading platform that automates the buying and selling of your preferred crypto strategies. Sign up today at https://www.archpublic.com and start your automated trading strategy for free. No catch. No hidden fees. Just smarter trading.====================0:00 - Intro0:41 - What is digital credit & what problem does it solve?5:17 - How the carry trade works8:48 - Daily dividends & dividend structure10:52 - Downside risk & balance sheet protection16:18 - The strongest critique of digital credit19:32 - Michael Saylor selling bitcoin27:03 - Bitcoin price action vs. bullish headlines31:32 - Where is digital credit taking capital from?36:44 - Banks, Jamie Dimon & systemic risk38:52 - Strive vs. Strategy42:38 - Too much bitcoin held by public companies?48:33 - Strive's mission & the road ahead

As a Bitcoiner and a longtime Bitcoiner, I firmly believe that this debt crisis will not get better and we're transitioning to a Bitcoin future. And I think digital credit could be the most important asset in this transition period. What's going on, guys? Today, we've got a great conversation with Matt Cole. Matt is the CEO of Strive Asset Management. And in this conversation, we do a breakdown of digital credit. He explains what it is, how it works, what the risks are, and how they would respond to different situations. We also get into all the pros and cons of both strategy and strive having these instruments in the market and how institutional investors are responding. I found this conversation fascinating. It helped me better

understand digital credit. I hope it helps you as well. Here's my conversation with Matt Cole. All right, Matt, I want to talk about digital credit. This seems to be taking the world by storm, but at the same time, it is creating massive controversy. Can you just describe what is the problem that digital credit is solving? Yeah, I've been reflecting on this a lot. And and I think the problem that it's solving is actually bigger than I first imagined. So maybe I'll start with what I thought the problem that it was solving is and kind of what I think the problem that it's solving is now. So when when we first launched Seda, what I viewed it as was just a preferred equity security. It pays a high interest. It is backed by by Bitcoin risk.

And as an issuer, I was concerned with a couple of risks on the issuer side. So like strive or strategy, namely maturity risk, just that Bitcoin is such a long duration asset. It has no cash flow. And we're trying to underwrite a perpetual bull thesis in Bitcoin. And what I wanted to do is have the longest liability I possibly could have, which is obviously a perpetual liability. And then secondarily, remove negative convexity to the maximal degree to the upside.

So because we know Bitcoin over time on average goes up into the right, and I think it's going to go to literally infinity, that I would prefer for my liability to not convert to equity when Bitcoin's ripping higher. That can constrain the total return as an issuer. So I just viewed digital credit as a better source of financing. And I was happy to pay a double digit interest rate to not have the negative convexity to the downside of maturity risk and not have negative convexity to the upside of equity conversion. And I just thought that was a good trade for us as an issuer. And so I wanted to be all in on digital credit.

And just coming from the fixed income world, I know how yield starved we are. you've covered a lot. And I agree with this, the concept of the 60-40 portfolio being dead and coming from a fixed income background and just thinking through what I think that's almost like a consensus position, 60-40 is dead or it's consensus in our circles. What is completely not consensus is what do you do with the 40? Do you put it in Bitcoin? Do you put it in prediction markets? Do you put it in digital credit? What do you do with it? There's a million. Do you put it in trend following solutions. I've seen so many different ideas,

a lot of interesting ideas, but I thought digital credit could make a play at that. So that was just kind of the simplistic idea to start. Where I think it's going now is something much bigger. And this much bigger idea is that right now, fiat currencies are still the primary form of currency. The dollar is still the reserve currency of the world. As a Bitcoiner and a longtime Bitcoiner, I firmly believe that this debt crisis will not get better

and we're transitioning to a Bitcoin future. The hardest part about that transition is how long will it take? And no one knows the answer to that. I think Bitcoin continues to go up over the course of time, but does it take five years? I don't think so. Does it take 10 years? Does it take 20 years? Does it take 30 years? Does it take 50 years? No one really knows what that transition will look like. But when you look at other emerging third world countries that have had their currencies debased, what you'll see is in those countries, as that starts to happen, more and more the citizens look for alternative things to use as currencies and to kind of ditch the whatever, the Argentinian peso or whatever the currency we're talking about. And I think

that's going to happen in the U.S. as well. And I think digital credit could be the most important asset in this transition period that kind of smooths it out, minimizes the volatility. People see where it goes, but you don't have to make as hard of a prediction of when it happens. You don't have to write out as much volatility. And what's interesting is that if that thesis plays out and digital credit is this transition asset, maybe the ultimate transition asset, I don't think it'll be the only transition asset, then it in and of itself could actually accelerate hyper-Bitcoinization because you actually have fresh sources of demand coming in to digital credit.

So I think it plays that role. I don't think it's a forever thing. I think if we move to a hyper-Bitcoinization world, then Bitcoin becomes money, but I think it could become very interesting for several decades. Now, when we think about this digital credit, can you just explain the very simple concept of you all are taking capital from investors, you are promising them this yield in perpetuity, and then you are buying Bitcoin. How does this work? Or like when you describe it to someone for the first time, what do you say? Yeah, so as an issuer, it's really a carry trade. So we

have a cost of capital. So for Seda, it's 13% right now, it's variable rate, because the issuer, we are trying to pay it minimize volatility around 100. So it could go up could go down. for Stretch Strategies products, it's 11.5%. And so what we are making an investment bet on is that the average compounded annual growth rate of Bitcoin into the future will be better than that financing rate. That is what needs to be true for our common equity investors to outperform Bitcoin. Bitcoin is the hurdle rate. That has to be true. That does not have to be true for the preferred equity investor to win and to have a great asset that can pay the interest in perpetuity, the interest rate for that to be true for them is much lower.

So for Seda right now, it's in the neighborhood of six and a half percent as that break even interest rate where Strive could pay interest literally forever into the future. And so sometimes people hear that and they say, oh, Strive is saying that if Bitcoin goes up six and a half percent, that everybody wins. No, everybody doesn't win. The Seda investor wins. They have a good credit. common equity investor, how it would likely play out would be Bitcoins going up, call it six and a

half percent on average. And the common equity probably largely just holds flat. It doesn't participate because all the Bitcoin returns are filtering into the preferred equity instrument. So it's just a structured finance instrument where you have the more senior pref and you have the more junior common. Now, when you think about this actual kind of return of Bitcoin going forward, what do you think that is? Is that 20%, 30%, 40% year over year, let's say for the next decade? Yeah, we have a long-term projection, call it for the next couple of decades of in the neighborhood of 30% a year. Right now with Bitcoin in a bear market, when Bitcoin goes down, that compounded annual growth rate projection actually goes higher to make up for the bear

market. And so right now it would be on the higher end of that range. I think this is a a time where you want to take risk. And so this kind of gets into the theory of amplification for a Bitcoin treasury company. And, and what I mean by that is that we have stated that, you know, we think somewhere, you know, call it in the neighborhood of 30 to 60, 70% is kind of for a clean balance sheet company, the range of amplification that generally makes sense and could be managed. And the reason that we go to 60 to 70, actually, is to say that Bitcoin going down itself could actually push amplification beyond that in the depths of a bear market. And so we ourselves as an issuer would likely stop around there when Bitcoin's

kind of at a current level, right around a 200 week moving average. But I think you really want to go and be aggressive. The concept of be greedy when others are fearful and you really want to push it to the max exactly at this period of time. But on average, call it a 30% CAGR is what I think we should expect. I don't think that that's really that crazy. It tends to be right around where I think it is as well. When you look at the way that you are paying out these dividends, obviously everything was monthly. Now we see stretch going to twice a month. You all have gone to daily. Can you talk about the pros and cons of you guys going to daily or even kind of twice a month? Yeah, it really gets into this call it epiphany I've been having of how big digital credit could be.

That digital credit is, you know, it's a preferred equity instrument. It's not debt. It's not a money market. It's not money. But in this transitionary period, to the extent that you can make the dividend a more continuous stream of events, then what it means is that someone that holds it doesn't need to hold it waiting for the next dividend event. They don't have to... Right now, when it's monthly, what you'll see in the behavior of digital credit is you'll see the price of stretch or SATA move up to par right around the dividend event. And you'll see the volume spike, which I think is the most interesting tell. Sometimes, if you're just looking at price, you actually miss the liquidity, which I think is

the most important driver of what's happening behind the scenes here. And you see a massive liquidity spike because everybody wants that dividend event. And then post-dividend event, it drops on average about by the price of the dividend, but some months more, some months less. And that economically makes sense. It's not anything that's crazy. But if you move to something like Strives doing with SADA, where it will be literally the first listed security in U.S. capital markets history, so like real innovation here to pay a daily dividend, then that dividend event is not an event that you really want to plan around. It's just a continuous stream. You either like SEDA or you don't like SEDA. And if you like it, you just

hold it. You're not trying to time a dividend event, which should reduce and compress the volatility. And if you reduce and compress the volatility, then it can be used more likely like a money market fund or like a savings account type sort of instrument. Now, when you think about kind of what can go wrong here, the first thing that my mind goes to is if you have to pay this in perpetuity, do you always have to pay a dividend? Could you pause the dividend? It sounds like you could lower the rate. What are some of the things that you could do to maybe mitigate risk over a very long period of time? Because in a couple of years, sounds great.

But what about 20, 30 years from now? Yeah. So what are the rights of the issuer? So, we could pause dividends and we actually would have a fiduciary obligation as a board to pause dividends if paying a dividend would put Strive into bankruptcy risk. And so, the next natural question is, well, what does the balance sheet look like? What would that scenario look like where something like that would be in the interest of the issuer of Strive? Where, you know, SADA is our flagship product. If we were to do something that impaired the confidence of Seda, that would permanently impair the entire strategy that we're trying to do, right?

So, obviously, it's an issue where we're going to do everything we can to not do that. But it's a fair question to say, what would that look like? What does your balance sheet look like? So, Strive has no debt. We have 18 months of cash and marketable securities. So, cash and STRC and reserves. We have over 12 months of cash and about six months of stretch reserves. And so what that means is that you start to look at risk and say, what does downside risk look like?

So if you were to assume the 2022-2023 bear market played out as an example, what that would mean in Bitcoin terms today would be about a $40,000 Bitcoin bottom. And for Bitcoin to not move off of the 200-week moving average to the upside until very late 2027, that's not a scenario that is impossible to imagine. I think it's more bullish or more bearish than my base case scenario. I'm pretty bullish on Bitcoin for the back half of this year, but it's not an insane scenario. If that scenario were to play out, Strive could literally do nothing and just use our cash dividend reserves and not have to sell a single Bitcoin through that entire bear market. And then if you were to say, well, bitcoin has something worse than 2022 2023 it's longer in duration it's down longer well then we still have depending on where you think bitcoin prices forty thousand dollars five to seven years

of bitcoin coverage in and of itself so once you start dipping into the bitcoin so you really have to start thinking about a scenario where it's a substantially longer and worse bear market than 2022 2023 in duration and downside before we even have to dip into our bitcoin and so it becomes very hard, not impossible, but very hard to see the scenario where we have to actually pause the dividends. You basically have to underwrite Bitcoin failing for that to be true. When an investor buys SEDA, how much of the dollar that they give you goes into Bitcoin versus goes into the dollar reserve? It's a dynamic question. So we're not just issuing SEDA, we're also issuing the common equity ASST. And we don't have a mandate to preserve the dividend reserve.

And so, actually looking at kind of the history of, you know, I can say a lot of different things as, you know, the CEO of the company, but, you know, don't trust verify. I think the actions are actually more interesting than what I could say, right? And so, when we IPO'd Seda in November, we started with the 12-month dividend reserve. Bitcoin was over $100,000 a coin. When we IPO'd we've gone into a bear market. And so it would be natural to say, well, I would expect that in a Bitcoin bear market, that might be when an issuer would start to use the dividend reserve. That's probably what it's for. But what Strive has actually done is we've increased the dividend reserve from 12 months to 18 months. We were under no obligation to do so. So now that we've

maintained it, we've increased it as SEDA has been increasing in size. And the reason is, is that we're actually seeing kind of the opportunity for Stata to be bigger than we expected. And we want to do everything as an issuer to preserve confidence in this instrument to be able to withstand downside scenarios. And so right now, we feel that it's pretty appropriate to try to maintain an 18-month dividend reserve. I think it would be very possible if Bitcoin went down to $40,000, the reserve is a reserve. And if capital markets and liquidity conditions completely dried up, it's a reserve. It's not something that has to be maintained. It should be used when needed. Otherwise, what's the point of even having it?

So I think it's possible we could dip into it. It's possible with SATA issuance that we often will put 100% of the money raised into Bitcoin. It's also possible that we might reserve, you know, an 18 month or a 12 month dividend reserve if we think that's the most appropriate action. But what's been actually happening is that both the common equity ASST has been firing and SEDA. And so it's really a dynamic question. But what is the first principle? What is the goal? The goal is to maintain confidence and maintain SEDA as a low volatility, high yielding instrument. And so that what that means is that, you know, if we have to reserve cash to do so, we will. But our goal is to stack Bitcoin.

What do you think is the single best critique of these digital credit instruments? I think the, it depends. I think there's two different sides of the best critique. One is, well, why don't you just own Bitcoin? Why don't you just own amplified Bitcoin? As a Bitcoiner, I've been very open that I do not own digital credit. I own Bitcoin and I own amplified Bitcoin exposure because I'm so confident in the direction that this goes. That is what I view as appropriate for me and what I think is going to maximize the returns for me and my family over time. And I can write out the volatility. I think this bear market's a bear market for ants. It doesn't even faze me. The reality is that that's, and there's a lot of

Bitcoiners that have that mindset, but that's kind of like a sicko mindset. Most people are volatility adverse. They have different needs in their life. They need cash flows. They have a lower duration ability. And so what I saw as the problem with Bitcoin, just in kind of anecdotes across people that I know, is that they tend to buy Bitcoin at the tops of the bull market. They They don't actually have conviction. They ride off of other people's conviction and don't do the homework. And then they sell in the depths of a bear market because they weren't prepared for the volatility.

And so I think digital credit provides the great product for them. But if you have the conviction and the ability, then going out the risk spectrum further, I think is appropriate. I just think that the product market fit for that to not be true is insanely massive. the other side, the risk adverse side, I think people say, well, it's not debt. You don't have the credit protections. And then they'll list like 50 different risks that are disclosed in the disclosures, which is fine. And I think what's fair is that every individual should look at any risks of an investment and assign a expected value, a probability of those, and then use those

to make a risk determination. And so if you think that Bitcoin is going to fail, if you think that people can't be trusted, companies can't be trusted, then you will likely assign a higher expected value to those risks than maybe I would, or maybe a lot of other people would. And so if you assign a higher value, then maybe you think the risk reward of these instruments is not favorable. I think that there's really one true risk to these instruments. And the reason I say that is, as an issuer, there was one key risk that we were trying to eliminate.

And that key risk was maturity risk. And so, if the issuer is trying to eliminate maturity risk, and that means that the investor of CETA takes that risk, and then they get compensated for that risk with a return, right? And so, if that's the key risk, then you have to put an expected value on that, which we kind of went through a little bit already when we were talking about downside scenarios. And so, you have to put a probability that you think that that scenario plays out and then what you think that means. But I think if you're willing to view Bitcoin as an asset that likely succeeds and you need income, then I think these are a very attractive risk reward security. Let's talk about strategy and Michael Saylor selling Bitcoin. Obviously,

they haven't done that in a number of years. They sold now infamously 32 Bitcoin. There's a lot of folks who are looking at recent price action of Bitcoin and saying Bitcoin went down a lot because Michael Saylor has given up. I think the Wall Street Journal called it a U-turn. It seems that there's a lot of speculation as to why this happened and what the implications are. What's your read? I think it was a necessary evolution from strategy. And so when we launched SADA in our investor calls, the IPO process, we explicitly said that if we need to sell Bitcoin, we will sell Bitcoin. It wasn't off the table. And the institutional investors really appreciated that from Strive. And then, you know, I think in call it 90% of instances, Strive has learned from

strategy. They've been the pioneers in the space. And a couple instances, I think that we've done something that has proven to be valuable. And one of them was introducing a cash reserve when we IPO'd Seda and now Stretch has a cash reserve also, which I think, you know, better reduces the risk profile the second was you know being willing to sell bitcoin um you know but saylor had been out there very publicly with a lot of messaging never sell your bitcoin we will never sell your bitcoin all these different things and and so i think he just had to message that i'm willing to do this and and that willingness to do that was always going to come with the critics saying oh this is the tip of the iceberg first it's 32 next is going to be 3200

but if but your goal should be maximizing total returns you know bitcoin's your hurdle rate but But ultimately, the goal is you want to maximize the total returns for your common equity shareholders. And to not have selling Bitcoin on the table when it might be advantageous, I think, is not the optimal way to do that. And so selling 32, I think just it clearly shocked the market. And I think just the fact that a 32 Bitcoin sell would shock the market, I think, shows me that he had to do this to get to the point where they can operate maximizing total returns into the future. And with Bitcoin down, you know, there's potential that, you know, just from like a tax loss harvesting perspective that more, you know, Bitcoin sells might make sense. But what's most important there is that I think he's going to be a net buyer of Bitcoin

effectively every single month into the future. And so if he did a tax loss harvest transaction and sold whatever, 50,000 Bitcoin, and then the next day, he buys back 50,000 Bitcoin, or even the next hour, he buys back 50,000 Bitcoin. I think that shareholders should be should be thankful for that, because it actually helps them put themselves in a better long term position. I don't think you nor I believe that Michael Saylor has given up on Bitcoin or has changed his views on Bitcoin. But do you think that there could be negative ramifications in terms of the story? Now it's a little bit more nuanced, you know, when you just say, hey, we will never sell Bitcoin, I think it's kind of the smooth brain,

right? Anyone can understand that. The second that you start to talk about, hey, we are intelligent capital allocators. Sometimes we're buyers, sometimes we're sellers. It kind of depends on the market. Obviously, that doesn't mean it's not a smart decision, but the story changes a little bit. And so how do you look at story versus maybe like what's the actual right decision as a capital allocator, whether for you or for Saylor? I think the actions ultimately will speak the loudest. And so the story, it's kind of like how we talked about what's the story of, you know, could you do you have to have a dividend reserve or what have you actually done? And so I think the story becomes a little bit

scary to some when you first see that first Bitcoin sell. But if over the course of the next year, if every single month strategy is a net Bitcoin buyer, then I think that story and that concern quickly ages poorly of I mean, I mean, I've been you're on X, I'm on X. And the amount of people, big X accounts, big Bitcoin accounts that are predicting right now that this is the start of Bitcoin sells, continual Bitcoin sells from Michael Saylor, I think becomes part of the narrative and the story for now. But I think that story will quickly evolve over time and quickly evolve over time that actually reduces the tell risk that I think people have always been concerned about is that strategy becomes like a for seller of a million Bitcoin.

right? If you're willing to manage it on the fly, on the go, then that risk becomes substantially less. And I think ultimately the risk of strategy failing reduces substantially, even though I think maybe the consensus is that it's increased right now. And ultimately that I think will be good for the price of Bitcoin. Today's episode is brought to you by Simple Mining. Bitcoin mining has a reputation for being complicated, risky, and hard to evaluate as a real investment. If you're considering mining in 2026, what actually matters isn't headline profitability. It's uptime, repairs, and whether the operation is run like a real business. That's why I've been using Simple Mining. They're based in Cedar Falls, Iowa, and they run a white glove hosting operation where

you own your miners. You choose your own pool, and you have Bitcoin sent directly to your wallet. They were featured on the Inc. 5000 list as the fastest growing company in Iowa, with over 40,000 machines under management. What stands out to me is execution. They have the number one rated ASIC repair center. And for the first 12 months, repairs are included. If mining margins get tight, you can pause with no penalties. And if you want to resize or upgrade your fleet, there's a marketplace to resell equipment instead of being stuck. To help people think it through whether mining actually makes sense right now, they put together a short resource called the 2026 Bitcoin Mining Blueprint. It walks through the five mistakes investors make

when allocating to mining, and they also explain how to avoid them before deploying capital. If it sounds interesting to you, you can get it for free at simplemining.io slash POM. That's simplemining.io slash POM. Go check it out today and see if you should get into the mining game. Today's episode is brought to you by BitGet. BitGet is the world's first universal exchange, serving over 125 million users with access to over 2 million crypto tokens and stratified markets such as 100 plus tokenized stocks, ETFs, commodities, FX,

and precious metals like gold and silver. They officially opened its TradFi trading suite on January 5th, 2026, and has already hit the milestone of $4 billion of daily volume just days later. Users can now trade 79 instruments across global macro assets, such as Forex, precious metals, indices, and commodities directly with USDT, all within their existing BetGet account. This experience is designed to feel familiar to crypto native traders while opening the door to macro-driven strategies without the need to switch platforms. users can also enjoy high liquidity and low slippage while trading these assets with up to 500x leverage the big get ecosystem is committed to helping users trade smarter with its ai agent to execute trade orders as a co-pilot big get is driving crypto adoption through strategic partnerships with la liga and moto gp aligned with its global impact strategy big get has joined

hands with unicef to support blockchain education for 1.1 million people by 2027 BitGet currently leads in tokenized triad by market, providing the industry's lowest fees and highest liquidity across 150 regions worldwide. Check them out at BitGet.com today. That's B-I-T-G-E-T.com today. Now, when you look at the actual price action of Bitcoin, obviously we have Saylor selling 32 Bitcoin. There seems to be two narratives around Bitcoin in relationship to geopolitics and the conflict in Iran, et cetera. There's also a deluge of information on a daily basis in the headlines of Wall Street institutions, sovereign wealth funds, et cetera, all adopting, using, being come much more

sympathetic to Bitcoin. It seems like all of the news is fairly positive, but the price keeps going down. And then you see the NASDAQ is going up. And so how do you rectify maybe the news to price action, especially with the context of all of these other assets that seem to be going up into the right while Bitcoin is not? I remember back to previous bear markets that I've that I've lived through where I was looking at headlines and scary headlines and asking myself, has my fundamental view of Bitcoin changed? and both in you know in 2017 2018 when we did the 2018 bear market and then 2022 2023 my foundational belief in bitcoin and the fundamentals of bitcoin actually increased during the bear market and the price action did not behave and and that wasn't surprising to me

but it was just interesting um and i think right now in this bear market i believe the same to be true. I think we're at the early stages of broad institutional adoption. One of those reasons still being the Bitcoin ETFs. When you look at the growth trajectory of ETFs in general, it is a three to five year maturity process. And we've already seen them be the most successful launch in financial products history. And it's only, you know, in the first couple of years. And so, track records are being developed. You know, issuers like Morgan Stanley are getting their Bitcoin ETFs out there. Different allocators in the space, they're still making them be investable in their investment policy statements. These just always structurally take time.

And so, I think we've only seen the beginnings of ETF adoption and Bitcoin adoption from those. On the digital credit side, digital credits only existed for almost a year at this point. So if you think about that in its track record building process, from an institutional perspective, it still has a couple of years to go. And I would argue it's building a great track record that the number one question that you would get as a issuer of digital credit last year is how how will it behave in a bear market? And what we've seen is that Bitcoin's gone down north of 50 percent at times. right now, it's approximately 50% from its all-time high. And you have digital credit instruments still right around par as we're recording this or just a couple of points below par. But importantly, the total return for both Sata and Stretch since they've been issued is

positive still because they're paying a high yield. So that yield has been more than even the prices that they've dropped right now. And so that correlation to Bitcoin is very low right? Because it's had a positive return when Bitcoin goes down 50%. And so it's proving the thesis of having substantially less volatility than Bitcoin, which I think eases the biggest institutional fear. On the retail side, you have people that obviously want it to stay at 100 every single day, and that's what we're trying to do. And I think these things will evolve to have less volatility over time. But on the institutional side, anything with a double digit yield is just attractive. And they're prepared for substantially north of high yield volatility.

And if you just pull up a chart of the HYG high yield ETF, and you look at how volatile that thing is, and that thing has a yield the worst of six and a half percent or so, and you double that with digital credit. And if you can double that and have less volatility, then I think it's just going to be something that will make a lot of sense for institutions to adopt. But we're in the early stages of that happening. So if that happens in a couple of years and ETFs get a three year track record in a year or so, then you could see mass institutional adoption continue to scale in 2027, 2028, 2029. Now, when you think about kind of the situation of this playing out, obviously this digital credit has become attractive to somebody, right? So somebody

is out there. Is this a cash replacement in their portfolio? Is this a fixed income replacement? How are people thinking about their portfolio construction, putting this in? Where is it taking capital from? And how do you see that evolving over time? I think it's going to evolve over time in a major way. Where I think we are right now is the biggest people that I see allocating to it are allocating it more from fixed income sleeves, that 40%. What do you do with that? putting it into digital credit. We've seen a lot of examples of real estate investors actually selling some real estate property and buying digital credit.

You get more yield with less work and real estate investors generally they understand the problem with fiat currency debasement. They're in a hard asset investors. And so we've seen a lot of examples on that. I think as Seda and digital credit generally starts to pay dividends more frequently, I think tokenization will be a further innovation on top of that. So you're going to see a lot of tokenized securities in the future.

I think there's no better security to tokenize than digital credit. And and as you tokenize digital credit, I think it will move ultimately to a place where right now say it will pay dividends on business days. There's no reason that in the future dividend frequency can't continue to increase further from there. And there's also no reason in the future that you won't see banks, banking products, financialization products built on top of digital credit. And you think about that a lot of

brokerage accounts already today offer checking type sort of features. This is not something that's new. But if you combine tokenization, you know, moving towards instantaneous dividend payments, and the ability to have financial products, debit cards, credit cards, things like that tied to the digital credit instrument. I think in that future, it'll start to be used as an alternative to currency for more people. I think that'll make some people on the internet lose their minds about the risks of that. But I think that's ultimately where it goes. And I think it makes sense. And I think this is kind of one of my core beliefs around tokenization and securitization and the fiat currency debt crisis is that as consumers look to move out of the

dollar, the financial ecosystem exists for securities in general to become alternatives to dollars. And that's not just saying digital credit, but just not, you don't necessarily need to hold dollars if you have tokenized things that you have a card attached to that you could sell. And I think digital credit is probably the best version of that. But I think we're still in the early stages of that adoption cycle. As I'm looking online at various news coverage of this, I think that people are still wrapping their head around this idea of Bitcoin backed credit. Are there other Bitcoin backed type of instruments or assets that you all are looking at?

Or do you think that it is less of a let's diversify from an asset standpoint and let's focus on just the Bitcoin backed credit? I think the opportunity set for Bitcoin backed credit, digital credit, whatever you want to call all these different things built on top of Bitcoin is close to infinite. And it's part of the reason why strategy has done this in a major way. We do this, a lot of other players in the ecosystem do this, is that Strive in and of itself will not be able to offer all of these products. We have SEDA. I think there's a possibility that maybe one more product comes, but there's also a possibility that it doesn't come because the demand for SEDA is just so high. But we can't

be everything to everyone. And we just can't utilize our balance sheet to provide a million different products that would create too complex of a risk structure within Strive. But other players that have Bitcoin on their balance sheet, I think will make plays into this Bitcoin backed credit ecosystem and will provide real products that will have real demand and a differentiated risk return profile than SEDA. And I could think of a bunch of different examples of this. The international example is just so easy and so obvious, but I think there's also a lot of examples in American capital markets. But the international example is SEDA, but paid in the pound, SEDA, but paid in the yen, SEDA, but paid in the euro. If this truly is the best bridge

between the current fiat-based system and the Bitcoin future, then different people are going to want to have different types of exposures to that risk profile. And it just makes sense that there should be multiple products out there. And so, I think SADA gets really big. But also, I think if that is true, and if digital credit were to speed up hyper-Bitcoinization, then you could start to see that really making banks mad. Think about Jamie Dimon, how he's losing his mind about stable coins paying interest and the fight between Jamie Diamond and Brian Armstrong. And it makes sense. If stable coins paid interest, then you might see a run on the banks. And so that creates a systemic risk for the banks. And I think that for the

U.S. capital markets, it would be best if banks are the blockbuster of today, that that transition happens orderly and it doesn't happen in, you know, a overnight fashion. That would not be something that anyone, you know, wants. But I think the problem is not the banks. The problem is the money. The problem is the dollar. And ultimately, I think that you can't constrain through regulation where this will ultimately go. And I think that digital credit will play that. And so, as an issuer, if you see that as a risk, you see, you know, in the future, Jamie Dimon screaming at Strive or screaming at Michael Saylor, then you want a few different things. One, you want to educate everybody. You want to educate DC. But two, you also want a

diversified ecosystem of issuers. You don't want there to be one head to attack. You want there to be a lot of different products out there providing different risk return that actually increases the chance of success, which is just kind of a unique thing to this ecosystem and to Bitcoin and why I firmly believe that, you know, this this is like a it's like a friendly type of competition in this ecosystem than like a cutthroat because we grow the pie together. And anyways, I just think that's a interesting nuance that even strategy right now, they're getting a little bit of heat online because of their support for Strive, because their stock is down or whatever. But what I think interesting and what I think is true is I think Michael Saylor and Fang Li are preparing themselves

to run the largest corporation in the world. And they see this from a longer term perspective, which is why they want to see growth and success across the ecosystem with Strive, but also with several other players as well. Now, this is part of the uncomfortable conversation i think of the industry i know you pretty well i know michael pretty well i think both of you are highly competitive you also are both very polite i think of you both as gentlemen and so there is this uh somewhat you know uh friendly competition i think that you describe um at the same time if there was an outsider who didn't understand some of the interpersonal dynamics here and the belief that you guys are actually benefiting from having each other i think

people would say hey wait a second you know they're going to go to twice a month dividend you go to daily. They come out with 11.5% interest, you go to 13%. That seems pretty competitive. What are the downsides maybe to having two? Because I do believe that there's actually a benefit to more players, grows the pie. It kind of normalizes this in the eyes of institutional investors. They see that it's a repeatable, scalable type of strategy, but there's got to be downsides. And so do you think that Strive is taking away some of the capital flows to the stretch product or vice versa? possibly in the short term, vice versa. You're a big believer in capitalism, obviously. So am I.

Just a little bit. Just a little bit. I think you're a fan. And as we know, the great thing about capitalism is that that competition pushes innovation and it pushes people to be the best versions of themselves. It pushes companies to be the best versions of themselves, which ultimately grows the pie to be substantially larger. If you were to go to a system where there's one issuer, how it would likely play out would be lackadaisical innovation. You don't need to do it. There's no competition. And so you could just sit and provide an inferior product and it would be the only product. And I think that would be how it would play. And so you think about some of the things that Strive's

innovated on, providing a cash reserve, that might seem like a silly innovation. It's like, it's not is it really even an innovation but i think it improved the products strategy then followed they saw how the market reacted to that the willingness to sell bitcoin um the frequency of dividend payments to really push that um strategy had made some you know initial statements that nasdaq rules only allowed you to pay this amount of of dollars actually we thought that was true too it wasn't like when they'd said that we were like oh like they're wrong we actually were pushing every angle to see if that wasn't the case and that is you know the great thing about capitalism is that we found a way within the system to get nasdaq and dtcc to say yes

right which is now open source strategy in the future can can copy that they can innovate on this and that innovation from different minds i think makes these products substantially better and grows the pie and in the meantime you know it's like we might you know do something that's really cool. We stack a bunch of Bitcoin. They do something that's really cool. I mean, their scale is just so much massive to us, right? Like, I mean, even when we stack a lot of Bitcoin for them, it's like, you know, effectively nothing. But, you know, for us, it's meaningful. And ultimately, I think that provides a better system. I think in the short term, that can cause flows to go more one direction than the other. But ultimately, as a Bitcoin balance sheet company,

the most important thing is making Bitcoin win. If Bitcoin wins, every company that has substantial balance sheet of Bitcoin, they win. And so if Bitcoin doesn't win, then we all lose. And so I think that innovation, making these products better, driving demand, ultimately benefits the most important thing, which is our balance sheets. Now, when you think about strategy, they obviously own a lot of Bitcoin. It's something like 840,000 or more Bitcoin. You all have also gotten into double digit thousands of Bitcoin. Is there too much Bitcoin that can be held by public corporations? If it was 100% of the Bitcoin, sure. But when you think about money, whether you're talking about dollars or whether you're

talking about gold, the majority of those types of commodities, dollars, currencies are typically held by institutions anyways. So I think that's just the natural arc of these types of things. What I think is great about Bitcoin is that it always preserves that ability to opt out and have your freedom money in self-custody. And that's something that we fundamentally believe everybody should do. But what's interesting about Bitcoin, because it's so scarce, is the amount of Bitcoin that you need to hold in self-custody to kind of have that insurance is not very much. So one of the stats that I like to talk about is in 2017, we gave basically everyone in our family, my wife and I, 0.05 Bitcoin on a ledger and it had a note attached to it. And what that

note said was with 0.05 Bitcoin, even if 100% of the Bitcoin was held in America, you will have more Bitcoin than the average American can hold. So if you're concerned about the system falling apart and needing this opt out, literally that amount of Bitcoin should be enough to make it. And so if that's enough to make it, then ultimately I think what will happen is that for most people it'll be held in institutional wrappers, whether that's ETFs or Bitcoin treasury companies. And when you think about Saylor's stack, it probably gets to a million bitcoin i think probably this year uh and if that were to happen you know he holds approximately five percent of the supply and when i think about any distributed ownership structure five percent

is not a controlling position it's a large position it's the i think in sec land if you own five percent of a stock it's like when you start to have to disclose that you have a stock it's not a controlling position it's just like the the minimal of like a material position and in their eyes. And so I don't think it's anything to the level of concerning. And even if he doubled it, it would be very large, but I don't think it would be something that overtakes or takes down the network. It's always interesting to me, like a corporation, technically, you know, Michael Saylor, you, you don't own a hundred percent of the corporation, right? They're shareholders that have a claim on the assets and the cash flows. And you know, it's a little weird because they're

kind of pulled together in this name strategy or in strive. But I do think also at the same time, you control to some degree, you know, the company, right? In the sense of you're making decisions as the steward for those shareholders. And so I guess the other part of this is, can there be too many digital credit instruments? Like, is there a point where you say, okay, you know, two is better than one, three would be better than two, but 25 of them would be a net negative and there'd be too much fractured energy, capital, you know, mental focus? There definitely probably is a level there, but it's going to be such a high level that it's not even a concern of mine. Frankly, I would love to see that happen. You think about financial services, how many banks are there? How many

insurance companies are there? And if you were to ask the average American, even for the largest banks, what's the difference between JP Morgan and Bank of America? I don't think the average person could give you any answer they would just say they're they're two really large banks um and and so even just like two of the same thing i think is is a good thing and and arguably when you have you know too little you have a couple major banks well what's happened in the banking industry you have systemic risk tied to single institutions and i don't think that's a a good thing for the ecosystem. And so having 20, 30, 50, 100 different issuers, I think would be a great thing. It starts to actually look more like a capitalist society where there isn't single

points of failure, where you think about why the US government, if JP Morgan ever failed, you 100% know they're going to bail them out. But in a true capitalist society, you wouldn't want that to be true but part of the reason the banks got so big was because of regulation they made it very hard to compete with the banks post gfc and you got these emergence of these mega banks i think it would be healthier for bitcoin uh for that not to be true i think it would ultimately be healthier for strive for that not to be true um for strategy for that not to be true um you think about like if if strategy held all the bitcoin um in several different ways that would increase risk even to strategy shareholders. It kind of creates a single point of failure for the

US government to potentially go after. And so a thriving ecosystem is better. The last thing I'll say on this is that just even you look at ETFs, if you wanted a digital credit ETF, that you need probably at least 30 issuers of digital credit to have a diversified compliant 1940 Act product. And so when you only have two, you're kind of in this land where it might be really good for strive or for strategy on an individual basis, but for the ecosystem, it's not great. And then you come back to, well, our ecosystem is built on a foundation of a Bitcoin balance sheet. And so a thriving Bitcoin ecosystem, it is going to be the best thing for our balance sheet over the long term. When you talk to your team internally,

how do you describe what the opportunities in front of you guys um it was this evolution that that we talked about so the first version being the best form of financing for us we thought it was a superior form of financing that reduced risk and allowed us to take on a higher level of amplification while controlling risk and now it's really taking this this kind of what i would stewardship position of if we believe and we do believe that digital credit will play this transitory role between today's fiat you know world and tomorrow's bitcoin future that's a really big role to play as as a as a firm and we need to be excellent stewards of that through sata through helping evolve the growth of digital credit through you know working even with you

know, strategy and unofficial capacity going out there and telling the world and, and trying to be the most transparent companies that have ever existed. I mean, you can go to our website and the risk of SATA and the risk of ASST, it refreshes every 15 seconds. I'm outside of the Bitcoin ecosystem. I'm not sure of another ecosystem where you can refresh the risk of a security every 15 seconds. The institutional world lives in the private credit land where you get a mark every three months. And in the meantime, it's complete opaqueness. And so ultimately, it's being transparent, it's being out there, it's openly discussing kind of the risk and the opportunity set, and then actively working to improve these products and

actually making the things we say true, which I think that any great entrepreneur and investor can do through actions. That's just been true historically, is that the true innovators in the world, the people that we all look up to, like an Elon Musk, they go out there and they say crazy things. They actually believe these crazy things. I think a lot of people think they're just BSing people and they're grifters or whatever. But what I found in the innovator ecosystem, and I would put you in this category too, and I don't say that just because I'm on probably because I actually believe it. You say crazy things, but I know you believe them. And then you go out there and you take risks and you try to make those things happen.

That's what we're trying to do as well. And ultimately, in these things, there's risk. There's risk that the innovator doesn't succeed. But ultimately, I think that's what makes our capitalist society great is that you put capital in the hands of people that have major visions, and then they go out there and they try to make it happen. And that's what we're trying to do here. You know, it's always funny. Sometimes you say things and you know it's going to be or it's going to sound crazy. It's going to be received as crazy. Other times you say things that seem like common sense and then everyone else thinks that they're crazy. And so you sometimes get surprised by the reaction. Matt, thank you for taking the time to do this. I find it fascinating, the entire digital credit space. I think that both Michael Saylor, you, both of your companies, your teams have really

been pioneers here and continue to push this forward. And it feels like something that people may not quite understand yet, but is very rapidly becoming normalized and obviously entering into the portfolios of very smart capital allocators. Where can we send people to find out more about Strive or find you online to be able to follow along? The best place is just following us both on X. So myself at Cole Macro and Strive at Strive, and then our website at Strive.com.

You can refresh that risk every 15 seconds and see what Zeta looks like. Amazing. All right. Well, thank you for doing this. We'll do it again in the future. Awesome. Thanks.