Patrick Lowry, CEO of Samara Asset Group, said he dislikes the term “Bitcoin treasury company” and argued that the market is rejecting nearly every pure treasury play except Strategy, the firm formerly known as MicroStrategy that popularized holding bitcoin on corporate balance sheets. With public companies built around bitcoin holdings now an established market category, his critique goes to the heart of how that model serves the shareholders who fund it.

In a discussion with Grace Remington and Sean Hagan, Lowry explained why he considers “digital gold” to have been “stupid marketing” that framed Bitcoin as an investment rather than money. He said that framing is also why Bitcoin dips whenever the Federal Reserve discusses raising interest rates.

Lowry said Samara uses Bitcoin as working capital rather than simply holding it as a reserve. The company parks venture-fund commitments in Bitcoin and liquidates those holdings when capital calls are made — the points at which funds require committed capital to actually be paid in — regardless of Bitcoin’s price at the time. He described the approach as being used across more than 20 funds and across Bitcoin halving cycles.

The discussion also addressed the hurdle-rate problem — the minimum return an asset must deliver to justify the capital tied up in it — and why holding Bitcoin can become a disservice to shareholders. Other topics included MSCI’s decision regarding non-operating companies and the 1940 Act loophole. Both sit at the center of how treasury companies are judged: MSCI, one of the largest index providers, determines which stocks remain in widely tracked indexes, while the US Investment Company Act of 1940 governs vehicles whose primary business is investing in assets, a classification such companies typically structure themselves to avoid. The potential consequences if Bitcoin, Ethereum and XRP treasury companies trigger a broader backlash were also examined, along with what Lowry described as Europe moving backward through BaFin regulation, the first Bitcoin exchange-traded product and post-Merkel overregulation — BaFin being Germany’s federal financial regulator.

The conversation further covered France’s bond crisis, why Germany will not bail out France, and what rising sovereign yields — the interest rates governments pay to borrow — could mean for Bitcoin, including why the asset declines when the Federal Reserve signals rate hikes. Index classification, US fund rules, European regulation and sovereign bond stress together form the backdrop against which the treasury-company debate now plays out.

Chapters

0:00 “I Hate the Term Bitcoin Treasury Company”: The Market Is Rejecting Pure Plays
1:05 Why “Digital Gold” Was Stupid Marketing That Made Bitcoin an Investment
2:13 Hold vs. Use: How Samara Runs Bitcoin as Working Capital for 20+ Funds
3:59 Capital Calls Explained: Parking VC Commitments in Bitcoin Across Halving Cycles
7:17 The Hurdle Rate Problem: Why Holding Bitcoin Can Be a Disservice to Shareholders
11:46 MSCI’s Non-Operating Company Decision and the 1940 Act Loophole
13:37 Bitcoin, Ethereum and XRP: What Happens If Altcoin Treasuries Trigger a Backlash
15:21 Europe Went Backwards: BaFin, the First Bitcoin ETP and Post-Merkel Overregulation
20:20 France’s Bond Crisis and Why Germany Won’t Bail Out the French
23:30 What Rising Sovereign Yields Mean for Bitcoin and Why It Dips on Fed Hikes

Watch the discussion: https://www.youtube.com/watch?v=Rdwz6uXm7xc

Disclaimer: The views and opinions expressed in this show are those of the participants and do not necessarily reflect the official policy or position of BTC Inc., Bitcoin Magazine or any affiliated entities. This content is provided for informational and educational purposes only and should not be construed as investment, legal, tax or accounting advice. Nothing contained in this show constitutes a solicitation, recommendation, endorsement or offer to buy or sell any securities or financial instruments. Viewers should consult their own advisors before making financial or business decisions.

This post first appeared on Bitcoin Magazine and was written by Patrick Green. Original source: https://bitcoinmagazine.com/videos/samara-asset-group-ceo-bitcoin-treasury-companies-a-disservice-to-shareholders