Matt Cole, chief executive of Bitcoin treasury company Strive, said leverage is the most important factor behind total returns in a Bitcoin treasury strategy. In a post cited by ChainCatcher, Cole said Strive’s model shows that more than 99% of the variation in total returns is explained by leverage, while the effect of capital costs is far smaller than the market commonly assumes. He said Strive is aiming to outperform Bitcoin by maximizing total returns for common shareholders. Under the company’s base-case scenario, Bitcoin is projected to deliver a compound annual growth rate of about 50% through 2030. Cole also said Strive hopes to lift its leverage ratio above 60% later this year, though that target could become harder to reach if warrants are exercised in the coming weeks or if Bitcoin rises further.
According to ChainCatcher, Matt Cole, chief executive of Bitcoin treasury company Strive, said in a post that leverage is the most important driver of total returns in a Bitcoin treasury strategy.
Cole said Strive’s model shows that more than 99% of the variation in total returns is determined by leverage, while the impact of capital costs is much lower than the market commonly believes.
Strive’s target and base-case outlook
He said Strive’s goal is to outperform Bitcoin by maximizing total returns for common shareholders. In the company’s base-case scenario, Bitcoin is expected to post a compound annual growth rate of about 50% through 2030.
Cole added that Strive hopes to raise its leverage ratio to above 60% later this year. He also said that if warrants are exercised in the coming weeks, or if Bitcoin moves higher, reaching that target would become more difficult.
This article was originally published by Bit.Fan. For more cryptocurrency news and market insights, visit www.bit.fan. Disclaimer:
The market information, project data, and third-party content displayed on this platform are for industry information sharing only and do not constitute any form of investment advice or return commitment.
Cryptocurrency trading carries high risks. Users should fully assess their risk tolerance and make independent decisions. All profits, losses, and legal responsibilities are borne by the users themselves.
