Strategy (MSTR) has taken the financial world by storm as of late with their innovative Bitcoin treasury strategy. Founded as a software company over 30 years ago, they decided to make a radical move in 2020 when founder and former CEO, Michael Saylor, saw the large quantities of money printing from central banks all around the world and recognized this would negatively impact his company’s large cash horde and stagnant profits. He knew he had to make a move but was not totally sure what to do. After doing plenty of research and thinking, he decided that Bitcoin would be the move to make. The whole premise of this strategy is to move away from the traditional cash reserve setup that leaks value every year due to monetary debasement and switch to Bitcoin, a new financial technology with a fixed supply schedule that is backed by the most decentralized and secure network humans have ever created. 

Their plan started with simply converting their cash reserves into Bitcoin, but they did not stop there. Saylor and his team at Strategy recognized that by being a profitable public company they have special access to capital markets that they could then use to raise more capital to buy even more Bitcoin. This led them to financially engineer their equity to be powered by Bitcoin as well as capitalize on the opportunity to develop different financial products that provide different levels of Bitcoin exposure to different types of investors. They have convertible bonds for bond desks that otherwise could not get Bitcoin exposure, they have their equity and options market that acts as varying forms of leveraged Bitcoin for investors that are seeking that, and they have recently introduced preferred stock offerings.

They are spearheading corporate adoption of Bitcoin and have subsequently labeled themselves as and originated the term, Bitcoin Treasury Company. Along with this has come the introduction of different metrics including BTC/share, BTC Yield, and others as well as other companies following the strategy. Being that this is a new type of playbook that has never been seen before, there has been a whole host of different opinions on how to view Strategy. This website is my own take on how I view them and what they are doing. 

Specifically, my goal is to layout the framework to conceptualize Bitcoin and what Strategy is doing with it as well as cover the inner mechanics of their Bitcoin treasury operations and how they generate BTC Yield, which is in my opinion one of the main reasons to own a Bitcoin Treasury Company like Strategy. BTC Yield is the measure of how much BTC/Share changes, and it specific to a Bitcoin Treasury Company as it is something you cannot get holding Bitcoin itself or an ETF. In this website I specifically go over the math of how BTC Yield occurs, and how it directly relates to the premium of its Bitcoin holdings that the stock trades at, which is another contentious topic. I overall, want to give people a sense of how Strategy works as a Bitcoin derivative.  

This website is split into different pages that I have written to be read in order as they are laid out below from top to bottom as well as from left to right in the header. Please recognize that this is in no way financial advice, nor am I a finance or mathematics expert. This is a new type of company that market participants are trying to understand, and I do not necessarily think there is one single right way to view it. This website is one perspective on how to view Strategy that specifically goes into the framework of how to view the company and the math behind their Bitcoin buying operations and how their ability to generate BTC Yield combined with the potential to earn a return from this Bitcoin in the future is what leads them to act like a tool for individual investors to maximize their Bitcoin exposure.