Bitcoin-funded perpetual preferred shares offer 13–15% yields, with conditions attached

ColeMacro described a strategy for funding perpetual preferred dividends through long-term Bitcoin gains and cash reserves, with its sustainability dependent on continued currency debasement and Bitcoin appreciation.

The financing model channels capital raised through perpetual preferred shares into Bitcoin, pays dividends to preferred shareholders and leaves any residual returns for common shareholders. Holding cash alongside Bitcoin is intended to support payments through market downturns.

In an interview shared on Anthony Pompliano’s X account on November 13, ColeMacro outlined the approach as a perpetual short position against the US dollar: issuing preferred equity with continuing dividend obligations while investing around the expectation that the dollar will keep losing value.

He said Strive’s ETF asset management business accounted for at most 1% of the company’s value, with Bitcoin now its central focus. Its two preferred offerings carry yields of 13% and 15%, he said, arguing that continuing currency debasement and long-term Bitcoin appreciation could support ongoing dividends.

Returns for common shareholders depend on Bitcoin’s appreciation relative to the preferred dividend burden. ColeMacro said Bitcoin would need to rise by more than the preferred yields on average for common shareholders to benefit. He nevertheless argued that annual Bitcoin gains of around 7–8%, his estimate of currency debasement, could sustain dividends indefinitely, with effectively all Bitcoin returns going to preferred shareholders and none to common shareholders.

He identified duration risk, compounded by Bitcoin’s volatility, as the main exposure. ColeMacro said the company planned for a potential 80% Bitcoin decline, holding roughly 85–90% of its assets in Bitcoin and 10–15% in cash. The objective, he said, was to withstand a downturn comparable to historical bear markets without selling Bitcoin.

The second preferred offering followed investor requests for a fixed yield, he said. Investors considering the variable-rate offering were concerned that improving perceptions of its credit risk could push the yield down to 7–8% in three to five years. After modeling Bitcoin outcomes, the company introduced a fixed-rate offering with a junior position in the capital structure.

ColeMacro cited the fixed-rate share of the bond market, which he put at 93%, as evidence of the potential market. He expected fixed-rate preferred shares to attract greater demand than variable-rate products because investors wanted to secure high yields over time. He also said there was demand for yields above 15% and room for structures incorporating additional returns tied to Bitcoin.

His assessment of the credit risk was optimistic. He argued that Bitcoin-based credit products carried investment-grade risk when Bitcoin exposure was properly underwritten, while trading at prices associated with speculative-grade bonds. That was his assessment of their risk, rather than a stated credit rating.

About 70% of investors in the company’s offerings were high-net-worth retail investors, he said. Institutional investors frequently requested structures that would package the preferred shares into more familiar instruments with defined terms and maturities, while allowing the issuing company to avoid taking on debt. He said those requests could inform future products.

The broader business thesis rests on persistent currency debasement and demand for income. ColeMacro said AI-driven deflation might not resolve government debt problems, while income and retirement shortfalls continued to create demand for regular payments. In his account, sustaining the dividend strategy depends on long-term Bitcoin appreciation and sufficient cash to withstand downturns.