On... $STRC

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Any $BTC holder would be interested or at least curious with $STRC. $STRC is Saylor’s vampire attack on the fixed income market.


People say Saylor is delusional to implement the $STRC vehicle. Now, Im not going into the technicals of what $STRC is but am looking through a different lense. With this view, I think Saylor is taking a risk but not really bat shit crazy. I’m going to compare Saylor’s $STRC bet with a typical property investor, with some made up numbers. This is just an experiment and you can come up with your own numbers.


Lets make an assumption for a typical Real Estate investor as follows:- 1 million dollar house, with 10% down payment. That would be a 900k loan and 100k down payment. Assume the interest rate of about 7% per annum and 30 years loan. In a hypothetical Scenario. Lets say $STRC is a way for Saylor to “borrow” money to invest (in this case he buys $BTC instead of property). Instead of the banks, he is getting money from investors. Lets make the following assumption as close to the Real Estate investor as possible:- 1 million dollar, with 0% down payment. That is a 100% “loan”. Assume the interest rate of about 10% per annum ($STRC pays about 11% dividend per annum) and 30 years “loan”. This means he buys back the $STRC stock in 30 years for a million (In reality, he is not obligated to buy back the stock).


Chart 1 shows the comparison of the cumulative interest payment (Blue for $STRC and Green for Property). Chart 2 shows the comparison of the total payment of principal and interest (Blue for $STRC and Green for Property). Property is superior in both cases. You get a better deal in terms of costs. Chart 3 shows the Property appreciation (assuming 10% per annum) as compared to your cumulative costs. Huge profit, that’s why investing in property is a no brainer! In fact, its such a no brainer that my friend bought 8 property investments.  


What if we overlay the price appreciation of $BTC (Chart 4)? Saylor assumes 30% per annum. It blows everything out of the water! You might not believe me but there are 4 bars on the chart. Now we can debate whether $BTC will grow 30% per annum but that is Saylor’s bet and perhaps he is a bit delusional.


I don’t think Saylor is bat shit crazy. He is just convinced that $BTC will grow at a high rate, just like my friend who bought 8 properties think that in the long term property can only go up.













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