Michael Saylor promotes Bitcoin-linked preferred stock as a high-interest option for retirees
Michael Saylor's Bitcoin-backed preferred stock, STRC, presents a unique investment opportunity for retirees, offering a high-yield but higher-risk alternative to traditional savings accounts.
STRC's variable dividend yield of 9.5% far surpasses the typical 0.1% to 4% rates offered by traditional savings accounts (2, 5). The dividends are generated by MicroStrategy, which primarily uses the proceeds from the sale of STRC to purchase Bitcoin, currently holding over 628,000 BTC with a market value exceeding $70 billion (1, 3, 5).
The preferred stock is backed by collateral that guarantees about 120 years of dividend payments under normal market conditions, or approximately 24 years even if Bitcoin's price drops by a severe 80% (5). This backing aims to mitigate risk for investors, although it does not eliminate the inherent equity and market risks associated with Bitcoin investment.
The principal and dividend of STRC are tied to Bitcoin's price, making it a volatile investment compared to the stable returns of savings accounts (1, 3). However, STRC offers daily liquidity, providing easier access to funds compared to some other Bitcoin investments or locked savings products (2).
Saylor specifically markets STRC as a high-yield option for retirees seeking better income than traditional savings, but the crypto exposure means retirees must accept greater volatility and risk for these higher returns (5).
Notably, the preferred securities, including STRC, are structured as perpetual instruments that never mature, paying monthly dividends backed by MicroStrategy's Bitcoin holdings (4). MicroStrategy, formerly known as MicroStrategy, pioneered the corporate Bitcoin treasury strategy (6).
Recent developments in the crypto industry and the Bitcoin ecosystem have been supportive, as highlighted by Saylor during MicroStrategy's second-quarter earnings call (7). This week, the White House released a 150-page crypto policy report (8).
Investors should carefully consider their risk tolerance and investment horizon before deciding to invest in STRC. While it offers the potential for high returns, the investment carries a markedly higher risk profile due to the volatility of the crypto market.
- STRC, the Bitcoin-backed preferred stock, is marketed by Michael Saylor as a high-yield investment option for retirees.
- The crypto industry and the Bitcoin ecosystem have seen recent supportive developments, noted by Saylor during MicroStrategy's second-quarter earnings call.
- The White House has recently released a 150-page crypto policy report, highlighting current developments in the crypto industry.
- The preferred securities, such as STRC, are perpetual instruments that never mature, paying monthly dividends backed by MicroStrategy's Bitcoin holdings.
- The dividends generated by MicroStrategy to fund STRC are primarily derived from the sale of STRC, which are then used to purchase Bitcoin.
- MicroStrategy, formerly known as MicroStrategy, pioneered the corporate Bitcoin treasury strategy and currently holds over 628,000 BTC with a market value exceeding $70 billion.
