A storm of “Bitcoin treasury companies” is brewing in the financial world. In a guest appearance on the podcast The Wolf Of All Streets, Strive CEO Matt Cole argued that a new generation of crypto-based financial products, particularly the “digital credit” market, will fundamentally change the global financial system.
Cole suggests that at least 1% of the massive $300 trillion global credit market will be converted to digital credit, implying that an entirely new $3 trillion market will emerge in this space. This number indicates that Bitcoin has the potential to be even bigger than its current market capitalization.
According to the analyst, “digital lending” methods are emerging for institutional and individual investors seeking high returns while being wary of Bitcoin’s extreme volatility. Cole praised products such as Strive’s SATA and MicroStrategy’s Stretch, saying these devices proved their worth during the last bear market.
“When Bitcoin lost more than 50% of its value, SATA and Stretch experienced only about a 10% decline and quickly recovered to their original values before Bitcoin completely bottomed out. This proves that these products offer double-digit dividend/interest yields (11%-13%) with significantly lower risk than Bitcoin.”
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Cole said that while there was a boom in “starting Bitcoin treasury companies” last year, many companies lacked a true strategy or team of experts, making a wave of consolidation in the market inevitable.
“Even during Bitcoin’s mild winter, we saw many companies sell their Bitcoin holdings, which shows they lack long-term belief. There is a growing disconnect between those with true beliefs and those looking to get rich quick. In the future, we will see activist investors buying these weaker companies.”
In the interview, Cole also shared how he became a Bitcoin maximalist, explaining that he previously managed a multi-billion dollar portfolio of U.S. Treasuries (including $70 billion in fixed income under management within CalPERS), during which time he had direct contact with officials at the Federal Reserve and the U.S. Treasury Department.
“From 2011 to 2016, I was also a Bitcoin skeptic. But I saw with my own eyes that they were lying when they said they weren’t printing money or monetizing debt. They were just manipulating the system with Wall Street banks in between. I realized this debt crisis wasn’t going to end, so I invested all my money in Bitcoin at the end of 2016.”
*This is not investment advice.
