At the start of 2025, the Currency team decided to poll staff and punt three stocks each as part of a mini-investment challenge. We will be writing about our choices, where we went wrong and what we did right, in the next couple of weeks, but for reasons that will become apparent, one of those choices went disastrously wrong (mine, obvs) and I feel I should explain.

The parameters of our investment experiment were simple: all staff members should choose one local stock, one international stock and one wild card. Against almost all expectations, it’s been a shockingly strong year on global equity markets, and all except two of our punts are in the green. We handily beat almost every traditional benchmark, as we will brag about shortly (and endlessly).

But sadly, there is one especially bad choice – by far the worst – which was my wild card punt: Strategy Inc. Stung by this particular blemish on a generally impressive investment record, I was delighted to see that the CEO of Strategy, Michael J Saylor, was speaking at the Binance Blockchain Week in Dubai.

I’m attending the function as a guest of Binance, but really I was looking for some straight answers from Saylor about why he so irritatingly and malevolently undermined the introductory edition of the Currency staff stock selection portfolio.

Down 40%

First, some background. Strategy Inc (previously known as MicroStrategy until it decided there was absolutely nothing “micro” about the company) is a bitcoin treasury company. It owns about 650,000 bitcoins, worth roughly $59.69bn, and is the largest corporate holder of the asset. The company’s “business plan” is, essentially, to raise money on capital markets and buy bitcoins – and then repeat the process, endlessly.

The result is a highly leveraged punt on bitcoin, which is fabulous … as long as bitcoin is rising in value. Over five years, the numbers are great: bitcoin is up 250% over that period; 100% over the past two years alone.

But this year, something has broken, and bitcoin is down 0.4% year-to-date. Strategy Inc, as a leveraged bet on the crypto asset, has sunk about 40% year-to-date, and is now valued at slightly less than the sum of its bitcoin holdings.

The conventional wisdom on Strategy’s, er, strategy, is that it is a terrible bet. Famously laconic Bloomberg podcaster Matt Levine, for example, says a good corporate finance rule of thumb is: “If you run a company, and people are paying much more for your stock than it is worth, you should sell them as much of it as you can.”

When investors value Strategy at, say, $2 for every dollar of bitcoin it holds, the “rational” move, from the company’s point of view, is to tap that premium: sell more shares and buy more bitcoin. That creates a feedback loop: the company gets more bitcoin because people pay more for the stock, which may push the stock price up because the market expects more bitcoin accumulation.

The rational move from investors’ point of view is to do the opposite: buy bitcoin, sell Strategy Inc.

The pitch

But here is the problem: Saylor is just a fabulous salesman. One doesn’t necessarily like to be convinced by, you know, a pitch, especially if one is supposedly a cynical and critical journalist. But when the pitch is this good, well, you wonder. There is just something about baritone certainty, evangelical cadence and PowerPoint slides that look like they were designed by a committee of nuclear physicists and Las Vegas magicians.

If you were expecting an apologetic explanation for the decline in Strategy Inc’s share price at the Binance blockchain conference, you would be wrong. (To be fair, the stock is still up about 450% over five years.)

Instead, Saylor delivered an expansive defence of bitcoin’s role in reshaping global capital markets, arguing that the past year has marked an unprecedented shift in institutional acceptance of digital assets. He set out a sweeping narrative: bitcoin is no longer a fringe asset class, but the emerging bedrock of global capital, banking and credit.

And he’s not wrong. Two big changes happened this year. First, in stark contrast with the “hostile” regulatory environment of recent years, the Trump administration, and not just Donald Trump himself, have been openly supportive of digital assets.

That has led to the second major shift: widespread enthusiasm from the banking sector. Institutions such as Citi, JPMorgan, Bank of America, Wells Fargo, Vanguard and BNY Mellon – many of which were previously sceptical – have, in Saylor’s telling, moved to enable custody, lending, settlement and other services tied to digital assets.

“In the past six months,” he said, “the majority of major US banks have gone from resistance to participation.” These developments are the necessary precondition for bitcoin’s elevation from a speculative instrument to what he calls “digital capital”.

A superior form of capitalism

Saylor returned repeatedly to the argument that bitcoin’s global computing power, decentralised infrastructure and deep liquidity give it the characteristics of a superior form of capital. Its trading volume across more than a thousand exchanges, and the scale of investment flowing into it – over $1-trillion dollars, by his estimate – were cited as evidence of its extraordinary resilience.

By contrast, he said, conventional corporate treasuries are “decapitalising”, weighed down by low-yielding cash and short-term money-market instruments returning roughly 3% a year. Strategy Inc, he argued, represents the opposite approach: an attempt to build a new form of corporate treasury based on an appreciating asset rather than a depreciating one.

Saylor dedicated a major portion of his speech to Strategy’s increasingly complex financial products – including STRC (“Stretch”), STRD (“Stride”) and other structured instruments – which he described as the first generation of “digital credit”. Strategy’s bitcoin holdings back these instruments, collateralised to mute volatility, and structured to offer yields in the region of 10%-13%.

Stretch, he said, is the company’s most advanced instrument to date: a perpetual preferred equity product with adjustable monthly dividends, designed – in his words – to replicate a high-yield bank account backed by digital capital. He noted that Stretch has traded “at liquidity levels dozens of times higher” than traditional preferred shares, at times exceeding $100m per day.

It all makes your eyes pop. And wonder.

A double-edged sword

Saylor acknowledged that the company’s core exposure remains straightforward: Strategy requires bitcoin to appreciate at least 1.36% per year, over the long term, to support its dividend obligations. Any return above that, he said, strengthens the company’s balance sheet and increases investor returns.

But the problem is really simple: any return below that – like we got this year so far – weakens the company’s balance sheet. The vast architecture of credit products doesn’t mitigate that risk – it intensifies it, which is presumably why punters have dumped its shares.

For me, and I suspect for other investors, my terrible stock punt constitutes a salutary lesson: leverage is by definition a double-edged sword. And, as my colleagues will no doubt tell me (endlessly), past performance is no guarantee of future result.

But if you are going to choose a wild card, you might as well go Serengeti rather than merely Waterberg. Wild is wild. Surely.

Tim Cohen is visiting Dubai as a guest of Binance.

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_{Top image: Michael J Saylor attends BTC, ETH and WLD are Friends on September 16 2025 in Washington, DC. Picture: Tasos Katopodis/Getty Images for Eightco Holdings (NASDAQ: ORBS) and BitMine (NASDAQ: BMNR).}

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