Strategy's Bitcoin treasury edge hard to match, says Ammous

Economist Saifedean Ammous, author of "The Bitcoin Standard," has cast doubt on whether rival Bitcoin treasury companies can compete with Michael Saylor's Strategy, citing its unmatched scale and cash reserves. Speaking on the latest episode of Cointelegraph's Proof of Thesis, Ammous said he sees "no compelling case" for choosing another Bitcoin treasury firm over Strategy, which holds 847,666 BTC acquired for $63.95 billion according to its Monday 8-K filing. The company also reported a $5.02 billion cash reserve earmarked for preferred stock dividends and debt interest, a buffer Ammous believes insulates it from market stress even in significant drawdowns.

Strategy's dominance, according to Ammous, stems from its ability to borrow at lower rates thanks to its sheer size, giving it a structural advantage over smaller treasury competitors. The company's financing model faced scrutiny this summer when Bitcoin fell below $60,000 and its STRC preferred stock traded well below its $100 target. In response, Strategy raised STRC's annual dividend to 12%, repurchased shares, and temporarily sold Bitcoin to fund obligations before resuming accumulation. "Even a much bigger Bitcoin drawdown is going to leave them in a decent situation because they have enough cash on hand to make their payments," Ammous said.

Looking ahead, Ammous predicted Bitcoin has likely already bottomed, though another crash remains possible, with the next cycle peak potentially arriving in 2029. He also advocated for businesses with positive cash flow to allocate surplus reserves into Bitcoin as a long-term store of value, while cautioning that holding the asset directly remains preferable to buying Strategy shares due to the inherent risks involved.