How Saylor Can Make Strategy Great Again

Yield is at the heart of finance. It is literally everywhere you look. Michael Saylor’s Strategy is in a world of hurt right now from a perception standpoint. They have a roughly $1.7B per year debt obligation from their preferred shares, and they seemingly have no way to pay it over the long term.

This is the issue they’re facing now, and why everyone calls it a Ponzi scheme: if they can’t raise new capital, they won’t have the money to pay dividends.

The fix is actually incredibly simple and obvious. In my opinion, there’s a two-fold strategy here that would completely turn around the company and make it a behemoth in finance that would make BlackRock shake in its boots.

The two-part strategy is simple:

1. Make their BTC productive: Start earning yield on the $50 billion worth of Bitcoin they already own.
2. Build FinTech products for BTC: Use the incredible brand leverage they have to build simple BTC financial products that generate real revenue.

Let’s dive in.

Make BTC Productive Again

Strategy owns 847,363 BTC. It is currently worth $50 billion.

That’s not a small amount of money.

If this BTC were deployed and earning 5% yield, it would generate $2.5B per year in annual yield for the company.

The current yield obligations of Strategy are about $1.7B. The yield generated solely from using the BTC they already own would cover 100% of their yield obligations, operational overhead, and it would leave extra cash leftover to buy more Bitcoin and accretively grow MSTR shareholder Bitcoin per share (BPS), which Saylor has talked about so much in the past.

Warren Buffett would never do what Saylor is doing. But if he did, he would absolutely be generating yield on it.

That is a no-brainer. If you have the capability of safely generating yield, then you should take advantage of it.

This leads us to the real issue with this strategy: you can’t be 100% positive that there is zero risk in leveraging your BTC to earn yield. There is always going to be some degree of custodial risk.

That being said, there are many options to deploy BTC and earn yield.

Saylor used ChatGPT to build STRC. He can use ChatGPT to build a risk/reward model for deploying his $50B worth of BTC as safely as possible, ensuring there isn’t blow-up risk.

This would likely involve deploying some material % of the BTC — not all of it — plus buying insurance on the deployed capital (yes, you can do this), and spreading it around to multiple CeFi and DeFi protocols that don’t have contagion risk.

The great news: Saylor can chase mild yields. 3% per year. 4% per year. 5% per year.

Lower yields will likely indicate safer, more saturated protocols. Coinbase has yield products, Binance has them, Aave has them.

There are hundreds of options for BTC yield products these days.

This is not to mention that he can also go out and privately lend BTC for yield. Imagine he goes to companies like BlackRock and other institutions/ETF managers and lends BTC at attractive 3–5% rates.

Mix all of these together, slap some insurance on it, and you have a 3–5% yield machine on a $50B balance sheet. It solves Strategy’s debt crisis overnight.

Make FinTech Products

Once you’ve established a great model and implemented it for yield, start building real FinTech products around Bitcoin.

Strategy and Saylor have a now-infamous brand in the world of Bitcoin. They can build and service incredibly simple financial tools and services for their Bitcoin audience.

These tools can generate additional revenue for the company. This won’t be billions of dollars, however; it would likely be enough to more than cover core operations and overhead.

This is a game of perception. When it comes to growing Strategy, perception is truly the key.

If Strategy can say, “We are a profitable company” in terms of building products and services that generate more revenue than they spend, this would change the entire perception of Strategy.

Setting aside dividend obligations, of course. But those are already covered through the yield generated on their BTC stack.

To sum this all up:

1. Get the $50B Bitcoin productive today
2. Build out a team to make simple but effective FinTech products leveraging the Strategy brand to generate additional profits

The immediate effect will be a recovery of STRC, MSTR equity and general market perception.

From there, they can use both profit + additional ATM sales to buy even more BTC and continue scaling. The scaling will be even more effective during a bear market when BTC is cheap.