Strive CEO Says Bitcoin Could ‘Go To A Penny’ And The Company Would Still Survive Because It Has No Debt

Strive keeps around 85% to 90% of its balance sheet in Bitcoin and 10% to 15% in cash, which can cover its obligations during a downturn, the CEO said.

• Matt Cole said on Thursday that because Strive has preferred equity only, they have “no liquidation point.”
• Strive has two securities, including SATA and SATS, which pays 13% and 15% dividends, respectively.
• Cole said Strive had planned for Bitcoin falling as much as 80%.

Strive Inc. (ASST) CEO Matt Cole said that Bitcoin (BTC) “could literally go to a penny,” and the treasury company would still survive because it carries no debt that could force it to sell.

Speaking with Anthony Pompliano on the Pomp Podcast on Thursday, Cole explained that Strive raises money only through preferred stock, so there is no price at which its Bitcoin would be seized. “Because we have preferred equity only, no debt. We have no liquidation point,” he said.

He compared that to borrowing against Bitcoin, where a sharp drop can wipe out traders. “We see this in the coin markets every time it’s dropped. How many billions of dollars gets liquidated?” Cole said.

Strive has two such securities, Variable Rate Series A Perpetual Preferred Stock (SATA), which pays a variable 13% that rises to 13.25% in December, and Series A Perpetual SATS Preferred Stock (SATS), which pays 15%. 

ASST stock was trading over 1% down in overnight trading, after closing down 4% on Friday. On Stocktwits, the retail sentiment around ASST remained in the ‘bearish’ zone, while chatter around it stayed at ‘low’ levels over the past day.

Built To Ride Out Bear Markets

Cole said Strive planned for Bitcoin to fall as much as 80%. To do that, it keeps about 85% to 90% of its balance sheet in Bitcoin and 10% to 15% in cash, which can cover its obligations during a downturn. “We could ride out any historical bear market without even having to sell a single Bitcoin,” he said. He added that the approach might even be too cautious. “Even if we had to sell 2% or 5%, that’s probably a reasonable risk for a company. You’re not blowing up,” Cole said.

Cole has made a similar case before. In June, he said Strive could keep paying dividends through a bear market mimicking one like 2022-23 using cash reserves, without selling Bitcoin.

A Bet Against The Dollar

Cole described the company’s structure as a long-term wager against the U.S. currency. Strive sells perpetual preferred stock, which pays dividends with no end date. “They will never stop debasing the U.S. dollar, and so we are perpetually short the U.S. dollar because we are selling a perpetual preferred equity, which will pay dividend forever,” he said.

Cole said Bitcoin needs to rise faster than SATA’s and SATS’s dividend rates over time for the company’s common shareholders to benefit. 

That cushion is already being tested. Strive held 43,153 BTC bought at an average cost of $87,821 per coin. With Bitcoin’s price trading near $67,018 at the time of writing, that’s about 24% below Strive’s average purchase price. 

On Stocktwits, the retail sentiment around BTC remained in the ‘extremely bearish’ zone, while chatter around it stayed at ‘high’ levels over the past day.

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