Matt Cole, CEO of Strive Asset Management, predicts the digital credit market could reach $3 trillion in a recent Bloomberg interview. Cole is making this projection during a Bitcoin bear market, arguing that digital credit securities paying income backed by Bitcoin exposure address fundamental problems in the income market. He stated that money markets fail to keep pace with fiat currency debasement, which he estimates at 6-7% per year, and that the 40-year treasury bull run from 1980 to 2020 has ended, leaving investors without adequate income solutions.
Cole Identifies Structural Income Market Problems
Cole's argument centers on what he describes as broken income markets. He stated, "The money is broken. The dollar is broken and people are losing trust in income solutions." According to Cole, money markets do not keep pace with fiat currency debasement, which he places at 6-7% per year. He noted that U.S. treasuries experienced a 40-year bull run from 1980 to 2020 that supported fixed income returns, but that period has concluded. Cole argues that individuals, corporations, and institutions require returns exceeding the rate of currency debasement, backed by an asset with staying power.
Strive Reports SEDA Product Performance and Cash Reserves
Strive's digital credit product, SEDA, pays a daily dividend. According to Cole, SEDA is the first listed security in U.S. capital markets history to distribute dividends daily. Cole contrasted this with money markets, which typically accrue and pay monthly, stating that the daily payout substantially reduces volatility. Strive holds an 18-month cash reserve, increased from 12 months when SEDA launched in November. Cole stated the company could operate until the end of 2027 without selling a single Bitcoin. He noted that SEDA has delivered a positive total return since inception, even through a 50% Bitcoin drawdown. By comparison, TLT, the largest treasury ETF, has returned negative 25% over the past six years, according to Cole.
Digital Credit Market Reaches $10 Billion Across Two Products
Cole acknowledged the digital credit universe currently consists of two products: SEDA from Strive and STRC from Strategy. He stated, "The fact that we've seen it explode to about $10 billion in the midst of a bear market shows you what this could be in good times." Cole indicated that reaching $3 trillion requires new issuers, new currencies, and different risk-return profiles for different investors.
FAQ
What is Strive CEO Matt Cole's prediction for the digital credit market?
Matt Cole predicts the digital credit market could reach $3 trillion. He made this projection in a recent Bloomberg interview, arguing that digital credit securities backed by Bitcoin exposure address fundamental income market problems.
What makes Strive's SEDA product different from traditional money markets?
SEDA pays a daily dividend, which Cole states is the first such structure for a listed security in U.S. capital markets history. Traditional money markets typically accrue and pay monthly. Cole stated the daily payout substantially reduces volatility, and SEDA has delivered positive total returns since inception despite a 50% Bitcoin drawdown.
