Bitcoin treasury companies built primarily around buying and holding the cryptocurrency may struggle to compete with Michael Saylor’s Strategy, according to economist and “The Bitcoin Standard” author Saifedean Ammous, who argued that the company’s scale sets it apart from rivals in the sector.

“I don’t see a compelling case for going to another Bitcoin treasury company other than Michael Saylor’s Strategy,” Ammous said on the latest episode of Cointelegraph’s Proof of Thesis show.

Strategy holds the world’s largest corporate Bitcoin treasury, with 847,666 BTC acquired for $63.95 billion, according to its Monday 8-K filing. The company also reported a $5.02 billion US dollar reserve set aside to cover preferred stock dividends and debt interest. That stockpile amounts to roughly 4% of Bitcoin’s capped 21 million supply. An 8-K is a disclosure public companies file with the US Securities and Exchange Commission to report material events.

Scale and cash reserves

According to Ammous, Strategy’s larger Bitcoin holdings allow it to borrow at lower rates, giving it an advantage that smaller treasury companies cannot easily match. He added that previous drawdowns had not brought the company close to liquidation. Borrowing terms sit at the heart of the treasury company model, in which firms raise capital from investors to buy Bitcoin and to cover obligations such as preferred stock dividends and debt interest.

Strategy’s financing model came under the microscope over the summer, as Bitcoin fell below $60,000 and the company’s STRC preferred stock traded far below its target price of $100. The company responded by raising STRC’s annual dividend rate to 12%, repurchasing shares and building its cash reserve. It also sold some Bitcoin to help fund dividends and STRC repurchases before resuming its Bitcoin accumulation.

“Even a much bigger Bitcoin drawdown is going to leave them in a decent situation because they have enough cash on hand to make their payments,” Ammous said.

Businesses with positive cash flow can put surplus cash into Bitcoin as a long-term reserve asset, Ammous said, adding that he expects more companies to adopt this model. “I think pretty much every business should be doing this.” He distinguished such reserves from the cash needed to cover daily, weekly and monthly operations. Whether more cash-generative businesses follow that path, and whether smaller treasury firms can secure financing on terms comparable to Strategy’s, are among the developments that could shape the sector.

Ammous nevertheless cautioned that investing in Strategy carries risks, saying he prefers to hold Bitcoin directly. Shares in a Bitcoin-holding company tie investors to the issuer’s balance sheet and financing decisions as well as to the asset itself.

Bitcoin’s next peak could come in 2029

Bitcoin has probably already bottomed, although another crash could still take prices lower, Ammous said. He suggested the next cycle may peak in 2029, with prices predominantly rising until then.

“We may bottom again, we may witness another crash that takes us down,” he said.

Smaller drawdowns could make Bitcoin more attractive to large asset managers as memories of previous bear markets fade, Ammous added.

Asked for a Bitcoin price estimate for 2030, Ammous offered a best guess of roughly $200,000, based on the Bitcoin power-law model and chosen near the lower end of the range he cited. “I wouldn’t bet on it,” he added.