True North Podcast
True North is a decentralized collective of investors, analysts, and capital structure experts exploring the outer edges of Bitcoin, digital credit, collateralized finance and m…
Recent episodes
Bitcoin Is the Moat | True North Podcast | Ep. 84
- Strategy's move to daily dividend payments across all preferreds (Stretch, Strife, Strike, Stride) beginning November 1st (Stretch) and January 1st, 2027 (others), with implications for ex-dividend mechanics and reinvestment compounding. - Strive's new SATS preferred offering priced at $90 with $700 million raised, representing approximately 21% cost of capital and 60% amplification to fund Bitcoin purchases. - Digital credit as **high-powered money** infrastructure: a settlement layer enabling low-volatility USD-denominated income instruments backed by Bitcoin, creating new capital pools and financial products. - AI disruption eroding traditional corporate moats, positioning Bitcoin as a durable, non-competitive store of value immune to execution risk and geopolitical threats. - Amplification management across market cycles: treasury companies must balance leverage gains during bull markets with risk reduction before local peaks to avoid overleveraged downturns. - Growth trajectory of digital credit outpacing money market fund and ETF industry growth rates, with potential to reach $800 billion to $1+ trillion by mid-2030s.
The Frontier of Credit | True North Podcast | Ep. 83
- Strive launched SATS, a fixed-rate perpetual preferred equity junior to SEDA, raising $700 million gross notional with daily dividends to attract high-frequency trading liquidity. - Daily dividends compress the underwriting timeline from long-term credit analysis to single-day dividend probability, fundamentally changing how credit markets operate and attracting algorithmic traders. - Capital structure comparison shows a 15% perpetual preferred equity equals ~27% cost at year five versus 7% five-year debt due to principal maturity cliff; perpetual preferred avoids this leverage risk. - Digital credit (perpetual preferred equity) removes the default tail risk that traditional debt carries, eliminating the lender's ability to compel asset liquidation and shifting downside probability benefit to common equity holders. - Bitcoin treasuries (Strategy, Strive, Nakamoto) have grown substantially while ETH and SOL treasuries remain flat, indicating credit capital concentrating on Bitcoin as the preferred collateral. - Jeff Walton's experience at fraudulent reinsurance company Vesttoo—which deployed $4 billion in fake collateral letters of credit—crystallized why Bitcoin's transparent, verifiable ledger makes it the best capital in risk markets.
Digital Credit Is Still Misunderstood | True North Podcast | Ep. 82
- Digital credit as a misunderstood financial instrument: only ~150 people globally understand it; structured as preferred shares collateralized by Bitcoin, not traditional debt. - SATA surpassed STRF in notional outstanding, reaching $1.3 billion; represents rapid adoption of Bitcoin-backed credit products in the market. - Amplification as the primary driver of total return; 1% difference in cost of capital matters far less than amplification ratio and Bitcoin CAGR in determining shareholder outcomes. - Amplification scales hyperbolically: moving from 50% to 75% requires double the capital issuance due to reflexive balance sheet mechanics. - Options market inefficiency: ASST call options lack strikes above 50% out-of-the-money, restricting leverage exposure compared to peers like MSTR and RIOT. - AI disruption risk: companies like Adobe face existential threats from open-source alternatives; $14 billion of Adobe's $29 billion in assets is goodwill (non-tangible), leaving negative tangible equity after debt.
Agents Interacting with Daily Dividends | True North Podcast | Ep. 81
- Strategy (MSTR) balance sheet remains robust at $76.8B in assets with 3.69x asset coverage; Strive (ASST) scaled to $2.3B in Bitcoin holdings with $250M in cash reserves, up from $200M weeks prior. - Amplification, not cost of capital differential, drives long-term shareholder returns; a 1% spread in perpetual preferred equity yields has minimal impact on terminal wealth multiples if Bitcoin sustains 50% compound annual growth. - Bitcoin Treasuries Conference highlighted shift from "passive Bitcoin holding" to **Bitcoin as productive capital**—investors now prioritize active capital allocation and cash flow generation over asset accumulation alone. - Strategy announced move to **daily dividends** on STRC starting November 2026, with other perpetual preferred equity instruments transitioning to daily cadence in January 2027; calendar-day basis differs from Strive's business-day structure. - Agentic AI trading will likely redirect capital flows toward higher-yielding digital credit instruments and Bitcoin, as agents optimize for mathematics over traditional financial inertia and suboptimal cash placement. - Warrant mechanics explained: holders can short stock, sell covered calls, or hedge positions to generate capital for future exercise; warrants represent a capital injection and optionality, not a sign of balance-sheet stress.
Agents Interacting with Daily Dividends | True North Podcast | Ep. 81
- Strategy and Strive's balance sheet composition and holdings structure reviewed at market snapshot of 847,666 BTC. - Amplification and leverage are framed as the primary driver of long-term shareholder returns, not marginal improvements in cost of capital. - Bitcoin Treasuries Conference insights shared on corporate Bitcoin adoption and institutional trends. - Strategy's transition to daily dividend payments and implications for STRC, SATA, and AI agents managing capital allocation. - Warrants explained as capital injection mechanism: warrant exercise would instantly reduce balance sheet leverage and unlock capacity for more perpetual preferred equity issuance. - Perpetual preferred equity identified as a more capital-efficient tool than common equity for accelerating Bitcoin per share growth.
The Berkshires of Bitcoin | True North Podcast | Ep. 80
- Strategy (MSTR) acquired ~900 BTC this week using USD cash reserves (not from share sales), bringing holdings to 846,000 BTC worth ~$71 billion; STRC buybacks continue as the primary capital deployment tool. - Strive (ASST) balance sheet grew from 24,500 to 26,355 BTC over two weeks; net capital increased $341 million to $2.5 billion with 17 years of dividend coverage on preferred stock. - Digital credit fundamentally reshapes risk distribution by eliminating principal repayment and tail risk, shifting probabilistic outcomes rightward compared to traditional credit instruments. - Berkshire Hathaway parallels: Strategy is adding capital ~1.5x faster than Berkshire's best decade ($12B annually vs. $8B), building a 200-week moving average framework for risk management and future leverage decisions. - Four-year Bitcoin cycle drawdowns are compressing (50% recent vs. 70% prior vs. 85–90% earlier), suggesting structural market improvements from ETF distribution and credit capital flows. - Derivatives data shows large open interest in ASST warrants (211k contracts near October expiration), MSTR calls (714k contracts), and STRC puts (concentrated in December); warrant strike prices and gap analysis suggest sophisticated hedging activity.
Insurance Risk Bubbling | True North Podcast | Ep. 79
- Bitcoin balance sheet analysis for MSTR and Strive (ASST), comparing amplification ratios, dividend coverage, and capital structure sustainability. - Warrant capital mechanics: approximately $700 million of Strive warrants expire October 12 at a $27 strike price; potential exercise would de-amplify the balance sheet from 46% to 33% but create capacity to issue additional SEDA preferred equity. - Private credit expansion in the life insurance and reinsurance industries, with insurers doubling exposure since 2007 and increasingly using CLO structures to optimize capital requirements. - Insurance industry capital arbitrage: tranching B-rated private credit into AAA/AA/A slices reduces required capital holdings from ~$100 to ~$34 per unit, driving systemic leverage. - 2008 financial crisis lessons via AIG case study: lack of capital reserves against credit default swap exposure created interconnected systemic risk; $85 billion emergency lending was required. - Current US Treasury dynamics: Scott Bessent tripled bond buyback guidance to $6 billion weekly; 10-year yields at 2007 highs signal market skepticism of debt sustainability.
Clean Sheet, who dis? | True North Podcast | Ep. 78
- Bitcoin technicals show strong bottoming signals at the power-law floor, 200-week moving average, and short-term holder realized price (~$70k), with potential bull-market confirmation ahead. - Strategy's balance sheet reached zero net leverage after raising cash, paying down convertible debt, and establishing a $5.1B USD reserve earmarked for preferred dividends. - STRC (Strategy's preferred equity) traded down to $72 in June, rebounded to $85+ following buyback announcements, and faces ongoing rotation dynamics as early IPO holders exit; par recovery expected within 4–8 weeks. - SATA daily dividends versus STRC semi-monthly dividends create different arbitrage structures and intraday trading dynamics; both products benefit from scale and liquidity expansion. - Strategy's potential path to 1 million Bitcoin at higher prices could create a $250B+ liquid reserve comparable to or exceeding major institutional balance sheets, with novel use cases in reinsurance, structured products, and prediction markets. - Federal deficits growing at 13% annually with net interest expense compounding; financial repression, Treasury buybacks of long-term bonds, and structural support for Bitcoin's monetary case.
We're So (Buy)Back | True North Podcast | Ep. 77
- Treasury announced a program to buy back long-term bonds (10–30 year) by issuing short-term T-bills, effectively functioning as quantitative easing and increasing market liquidity. - Bitcoin rose sharply in response to macro stimulus signals; the largest short liquidation day in Bitcoin history occurred, with $100 billion added to Bitcoin's market cap in 17 hours. - MicroStrategy's balance sheet strengthened significantly with Bitcoin holdings up ~$5.2 billion week-over-week; USD reserve increased ~$150 million; net leverage approaching zero. - Strategy Q&A revealed focus on digital credit products (STRC, SDRC), cash preservation ($4.8 billion), and refinancing away from convertible debt toward perpetual preferred equity structures. - NVIDIA announced a $500 billion backstop facility for GPU financing, raising systemic risk concerns about concentrated collateral depreciation schedules and competitive obsolescence. - Gold and equities rallied alongside Bitcoin; dollar index hit lowest point since May; Trump signaled willingness to consider U.S. government Bitcoin purchases.
Why Strategy's Balance Sheet Became a Blackhole | True North Podcast | Ep. 76
Strategy's balance sheet strengthened substantially this week, with Bitcoin holdings at 840,447 BTC ($53.3B value), USD reserves at $4.6B, and net leverage dropping to 3.9% from 5% previously—putting the company on track toward zero net leverage as cash reserves potentially reach $6.7B to $7B. Bitcoin's liquidity and divisibility create a fundamentally different financing model than traditional real estate: the company can sell fractional amounts at will through 24/7 markets, enabling dividend payments without forced fire sales and allowing tax-loss harvesting across different cost-basis wallets. The private credit market ($3.5T) is bifurcating between depreciating-asset collateral (Jane Street's $14.6B GPU-backed debt at 8.08%) and appreciating-asset collateral (Strategy's Bitcoin-backed preferreds), illustrating a stark contrast in underwriting risk and return requirements. MSCI released a new screening methodology for its Global Investable Market Index designed to exclude only three companies globally—Strategy, MetaPlanet, and Yellowcake—by creating five quantitative criteria that penalize large balance sheets and asset intensity, effectively targeting digital-asset treasuries. Institutional capital access to Bitcoin-backed credit requires longer-duration, lower-volatility instruments; building private credit structures on top of preferred shares could unlock mandates from pension funds and insurance firms currently unable to handle 25% equity drawdowns. BIP-110 (spam filter proposal) failed activation, leaving fee-market discipline as the sole mechanism for Bitcoin transaction spam control and opening the door to potential hard-fork responses from advocates.
Randomness & Probability 101 | True North Podcast | Ep. 75
- ColdCard vulnerability & community response: Hardware wallet entropy flaw (mk3 at 2^32, mk4/mk5 at 2^72) exposed millions in bitcoin. Strong cross-industry coordination (Unchained, Mara, miners, custodians) helped move funds; multi-sig setups proved superior to single-sig. Dan Hilleary shared personal experience of breach attempt and recovery. - Strategy balance sheet & capital structure: Strategy raised $290M on common stock, sold 1,638 BTC, added $250M to USD reserve, executed $80M in STRC buybacks. Net capital covers 32 years of dividend obligations; leverage ratio now 5%. STRC trending higher (from $72 to $94+) despite previous "death spiral" predictions. - Digital credit instruments (STRC, STRX): Preferred equity behaving well; STRC remains near par despite volatility. New 12-month cash reserve mandate improves credit quality. Convertible debt maturities (2027–2030) manageable with existing capital. Buybacks more effective than dividend hikes for managing cost of capital. - Entropy, randomness & mathematical security: Website tool visualizes key-space probabilities. True random 12-word seed = 2^128 (guessing one grain of sand in all Earth's beaches). Multi-sig mathematically ~30× more secure than single-sig. Even with every computer on planet for 100 years, breach odds: 1 in 10^52 power. - Bitcoin distribution & insurance perspective: Average global share if split evenly: 252k sats (~$163 today). US share: 6M sats (~$3,887). Frames self-custody as insurance policy against macro collapse rather than absolute requirement for small holders. - BIP 110 (Taproot activation-adjacent proposal): Signaling concludes Saturday. If successful, demonstrates mining pools cannot ignore 15k–20k node movement; failure would signal dangerous mining centralization. No organized UASF opposition yet running.
Architecture of Value | True North Podcast | Ep. 74
- Strategy (MSTR) has added ~$250M in cash to its balance sheet over the past week, bringing total cash reserves to $3.2B and net capital coverage of preferred dividends to 32 years (up from 29). - The conversation shifted from focusing on mNAV metrics to analyzing MSTR as a holistic balance sheet company, comparing its structure to Berkshire Hathaway, JP Morgan, and Exxon on leverage ratios, price-to-book multiples, and capital composition. - Preferred equity instruments (SATA and STRC) are being pair-traded by sophisticated investors; short interest in STRC has built to 3.6M shares, with tight spreads driven by arbitrage between similarly-structured securities. - Dividend frequency (daily for SATA versus twice-monthly for STRC) affects capital stickiness and investor holding incentives, making SATA less susceptible to large drawdowns due to its smaller investor base requiring less capital to replenish. - BIP 110 activation mechanics were analyzed using probabilistic game theory; signaling period begins early August at block 961,632, with mandatory activation requiring either 55% miner hash power approval or triggering a user-activated soft fork. - Algorithmic trading and automated capital deployment tools (now available to retail investors via Robinhood) are expected to reshape how capital flows and valuations evolve across equities over the next five years.
MSTR Sells Bitcoin to Fund Dividend | True North Podcast | Ep. 73
- Strategy's Q2 balance sheet showed 11% Bitcoin growth with 6% share dilution, resulting in a 4% increase in Bitcoin per share, demonstrating positive carry despite short-term market volatility. - Strategy sold $215 million of Bitcoin at ~$60,000 average price to cover dividend obligations on preferred equities; the sale highlighted Bitcoin's liquidity advantage versus traditional assets. - Debt management improved significantly: Strategy retired $1.5 billion of convertible debt in Q2 (18% reduction), lowering cliff maturity exposure, while perpetual preferred equity grew to $15.4 billion. - Interest expense on preferred equities now represents 3.37% of Bitcoin holdings annually—a carry rate that remains attractive if Bitcoin appreciates above M2 money supply growth (~7.5%). - Bitcoin-backed loans face adverse selection problems: lenders struggle to justify dollar lending against Bitcoin volatility when buying Bitcoin directly offers better risk-adjusted returns; perpetual preferred equity structured around corporation taking volatility risk instead. - Capital markets are evolving to treat Bitcoin as digital capital; duration matching between perpetual Bitcoin assets and perpetual liabilities (preferred equity) creates sustainable structures versus short-duration loan mismatches.
The Stress Test | True North Podcast | Ep. 72
- Strategy announced a new capital framework with five components: USD reserve policy ($2.55B cash target), revised STRC dividend policy (rate increased to 12%), digital credit securities repurchase program, common stock repurchase program, and BTC monetization program (up to $1.25B capacity). - Balance sheet health: debt-to-asset ratio improved to 8% after the capital raise; Bitcoin price would need to fall to $4,900 for total assets to fall below debt obligations (currently trading ~$61,000). - Strategy raised $1.1B in fresh capital in a single week despite Bitcoin weakness, demonstrating continued access to capital markets and reducing near-term liquidity concerns around preferred dividend payments. - Perpetual preferred equity instruments (STRC, SDRK, SDRD) are being framed as a new asset class and potential building block for future CLO (collateralized loan obligation) structures, opening access to institutional capital pools. - Short interest and leverage dynamics: retail and institutional actors took leveraged positions on digital credit instruments, leading to weakness and liquidations; borrow rates on SEDA spiked from ~4% to 60% week-over-week as shorts accumulated. - Strategy held 847,363 Bitcoin as of the announcement and remains on pace to reach 1 million Bitcoin by October–November 2026; Q1 2026 was the third-best acquisition quarter in company history.
The Long Game | True North Podcast | Ep. 71
- Bitcoin price volatility and technical analysis: Price dropped to $59k intraday before recovering to ~$61k, currently near the 200-week moving average historically considered a strong entry point. MSTR trading at $95–99 range with 1.64x beta to Bitcoin, amplifying both gains and losses. - Balance sheet strength and capital structure: Strive holds $51B in assets with only $6.7B debt, providing 28 years of dividend coverage. Even a 50% Bitcoin drop would leave $20B net capital. Design deliberately avoids forced selling during volatility through perpetual preferred equity rather than convertible bonds. - Digital credit instruments (STRC, SEDA): Volatility-driven by traditional market weakness and leveraged liquidations in tradfi, not DeFi loops. STRC short interest at $200M, SEDA at $58M. Instruments function as credit-wrapped equity paying daily dividends; core thesis remains intact despite price dislocation from par. - Capital markets integration and institutional demand: Multi-strategy hedge fund confirmed buying Bitcoin exposure exclusively through securities (MSTR, iBIT, options) due to custody and operational constraints. Approximately 10 million finance professionals in US; billions in capital cannot directly purchase Bitcoin. - Long-term positioning and "IPO moment": 120k Bitcoin from dormant wallets (5+ years old) distributed over eight months as early holders capitalize into mega-cap IPOs (SpaceX, etc.). Higher institutional liquidity and infrastructure today vs. 2021 peak supports orderly distribution. - Regulatory clarity and Basel framework: Current Basel III risk-weighting for Bitcoin at 1,250% prevents bank holdings; improvement in basal or "clarity act" would unlock institutional adoption.
The Launch Pad | True North Podcast | Ep. 70
- STRC price decline and cash reserve reduction: Strategy retired $1.5 billion of convertible bonds by drawing down its cash reserve, removing a cliff maturity but pressuring STRC to trade below par ($89 vs. $100). Market participants are calling for a death spiral, but analysts argue the balance sheet remains healthy. - Digital credit as a Bitcoin bridge: STRC and SETA are designed as professional preferred equities that enable adoption by offering yield and stability without requiring users to hold volatile Bitcoin directly. They serve as a financial rail for scaling Bitcoin into traditional capital markets. - Capital markets surge in AI and aerospace: SpaceX IPO raised $85.7 billion (largest in history) at a $2.4 trillion valuation; Alphabet, Meta, Oracle, and Nvidia are raising tens of billions for AI infrastructure. This capital rotation is temporarily draining liquidity from other markets, including digital credit instruments. - STRC as a Bitcoin derivative: Despite marketing as preferred equity, STRC trades as a Bitcoin derivative with 60–80% price attribution to Bitcoin and MSTR. Volatility is elevated but comparable to other high-yield credit instruments when adjusted for yield-to-risk. - Volume and liquidity as moat: STRC trades $366 million daily average vs. IBIT's $1.8 billion, but STRC has 30% more liquidity per Bitcoin held. MSTR trades $2.6 billion daily, making it the dominant Bitcoin leverage vehicle in the market. - Bitcoin's path amid AI boom: Long-term, Bitcoin benefits from AI-driven wealth creation and efficiency gains, but near-term capital is chasing AI IPOs and compute. The narrative shift back to Bitcoin may come in 6–12 months once these capital events resolve.
Strategy Sells Bitcoin, so what? w/ Adam Livingston | True North Podcast | Ep. 69
- Terminology & taxonomy: The hosts defend calling these instruments "digital credit"—not strictly debt, but equity analyzed through credit concepts that have existed for centuries. The term fits the definition of "provision of money/services with expectation of future payment." - STRC price volatility & FUD: STRC traded down to $94.70 from $99.84 post-record date, triggering fears of "death spirals." The hosts show this is normal dividend-harvesting behavior; volume spikes 5–6× before record dates and trails off after, creating predictable liquidity windows. - Balance sheet health & capital raising: Microstrategy has raised $143 million per trading day in 2026 and holds 843,000 Bitcoin with no debt. Monthly dividend obligation (~$100M) is only 0.19% of May's trading volume; annual obligation is 0.02% of estimated Bitcoin trading volume (~$7.3 trillion/year). - Bitcoin sales math: If forced to sell Bitcoin to cover dividends at current Bitcoin price, Microstrategy would sell only 1,535 BTC/month (3.1% of stack annually)—an infinitesimal portion of Bitcoin's daily trading volume. Raising rates to 12.5% or 13% adds only $26M/year. - Residual value & incentive structures: Critics claiming MSTR common equity trades to zero ignore call-option dynamics and liquidity. Even at severely bearish Bitcoin prices (never seen in history), incentives remain for buyback and dividend payment. - DeFi and digital credit future: Saturn and Apex protocols are building on top of STRC/SEDA, currently ~5% of issuance. Daily dividends (starting in 13 days at Strive) will unlock new use cases and DeFi composability.
The New Regime | True North Podcast | Ep. 68
- Strategy's balance sheet has strengthened dramatically since November 2022, with leverage ratios improving from 130% to 9.2%, despite issuing preferred stock and dividend obligations totaling $1.7 billion annually (34 years of coverage). - The company retired $1.5 billion of convertible debt using cash reserves, eliminating the highest conversion-priced converts and improving seniority of preferred equity by removing senior claims. - Bitcoin price would need to fall 89% (to $7,957) for assets to fall below debt; a 50% decline would still leave 16 years of dividend coverage, far healthier than the 2022 bear market scenario. - The AI memory bottleneck (HBM, DRAM, NAND) is the current constraint, not GPU compute, with Micron Technology 10x-ing in one year as the primary US manufacturer of these chips. - US federal debt ($38.5 trillion) now outpaces nominal GDP ($31.9 trillion) and compounds at 3.7% annually; federal interest payments ($1.2 trillion) equal defense spending, pressuring the Fed's policy options under new chair Warsh. - Digital credit products provide a free market-priced interest rate backed by Bitcoin collateral, unlocking capital preservation demand amid macro uncertainty and potential reserve currency erosion.
Reimagining Money | True North Podcast | Ep. 67
- Strategy Q&A session analysis: Saylor and team acknowledged Strive's daily dividend innovation, expressed interest in monitoring how STRC and SADA trade relative to each other, and indicated they are piloting an aircraft carrier while Strive operates with fighter-pilot agility. - Digital credit as new asset class: STRC and SADA represent the first large-scale perpetual preferred equity instruments; STRC is the largest in history at ~$10 billion, with SADA launched a day after for semi-monthly dividends. - Amplification and capital structure: Discussion of leverage mechanics—how preferred equity liquidation preferences create common equity amplification; Strive maintains zero debt, creating structural advantages for paying dividends perpetually. - Money market fund parallel: Digital credit market may follow similar exponential growth trajectory to money market funds (1972–today: $0 to $10 trillion), potentially exceeding underlying Bitcoin market capitalization. - Bitcoin coverage ratio (BCR) framework: Strive evaluates balance sheet health at Bitcoin floor prices (e.g., 200-week moving average, 20% below current); at $50K Bitcoin, Strive would have 11.2 years of interest coverage on annual $68M obligation from $769M balance sheet. - Ex-dividend dynamics and high-frequency trading: SADA trading shows algorithmic arbitrage within tight pennies; pre-market volume on ex-dividend dates is 7–10% of cumulative day volume, with computers capturing small intraday spreads and full rebalancing cycles.
The World Has Changed... | True North Podcast | Ep. 66
- SEDA announced daily dividend payments starting June, making it the first U.S. security to pay dividends daily instead of monthly, with zero debt on the balance sheet and 13% yield. - Perpetual preferred equity instruments (STRC, SEDA) are creating new arbitrage surfaces for institutional traders through dividend-clipping strategies and carry trades across credit markets. - Volume surge in STRC reached $1.5 billion in a single day and ~$2.5 billion over four days leading to record dates, indicating massive institutional participation in dividend-triggered trades. - Daily dividends shift risk provisioning for tokenized versions (Saturn, Apex), potentially unlocking higher yields and liquidity by reducing the duration risk institutions must buffer between dividend payments. - Digital credit as a Trojan horse for Bitcoin adoption, with SEDA/STRC enabling credit creation and leverage against Bitcoin collateral without requiring individuals to spend or hold Bitcoin directly. - Regulatory tailwinds from the Clarity Act clarifying Bitcoin as a commodity and restricting stablecoin yield, making these perpetual preferred equities the superior yield-bearing vehicle.