Michael Saylor: The next phase of Bitcoin is digital credit

Michael Saylor, founder of MicroStrategy, officially proposed the next evolution in the cryptocurrency market: Digital Credit. Using its preferred stock instrument STRC as a core example, he defines it as a rare low-volatility, high-yield tool in the crypto market, with a yield of 11.5% and volatility of only 2%.

Three-layer Digital Capital Structure: How Credit Fills Structural Gaps

At the summit, Saylor presented a systematic design of the digital capital market through a three-layer framework:

Digital Equity: A high-volatility asset designed to absorb upside potential in Bitcoin, suitable for investors with higher risk appetite.

Digital Capital: The middle layer, offering risk-return characteristics between high-volatility stocks and low-volatility credit.

Digital Credit: A structured yield tool with near-zero volatility, designed to remain relatively stable when Bitcoin’s underlying assets decline, meeting the needs of fixed income portfolios.

Saylor visually compared the market positioning of STRC through a volatility comparison slide: its volatility is lower than that of traditional bonds, the S&P 500 index, gold, Microsoft, Google, and even Bitcoin itself. He stated, “Digital Credit… is the most attractive credit instrument in the world. If you can create something with a Sharpe ratio of 4, it should be in every investment portfolio.”

Institutional Market Background: The 0.5% Allocation Gap and STRC’s Role in Filling It

The launch of STRC is set against the backdrop of institutional capital accelerating back into Bitcoin through regulated channels—U.S. spot Bitcoin ETFs are setting the longest continuous inflow record this year. However, currently, the proportion of crypto in suggested U.S. wealth allocations remains below 0.5%. Saylor believes that a digital credit tool backed by Bitcoin, with bond-like volatility and double-digit returns, is the key bridge to close this allocation gap.

Saylor confidently states about his own tool: “STRC now has a leading Sharpe ratio. I don’t know if it’s the highest among all listed companies, but it should be in the top 0.1% to 1%.” However, critics question the sustainability of STRC, suggesting that its 11.5% yield may heavily depend on Bitcoin’s continued price appreciation and Strategy’s ability to finance in favorable conditions over the long term, which could face structural pressures in a deteriorating macro environment.

In response, Saylor’s reply reflects his long-term optimism: “The future is full of uncertainty and challenges, but if you are an optimist, you will believe that change will help you.”

Frequently Asked Questions

What exactly does Michael Saylor mean by “Digital Credit”?

Digital Credit is the bottom layer of Saylor’s three-tier digital capital framework, referring to a low-volatility, high-yield tool backed by Bitcoin, designed for fixed income portfolios. Represented by STRC, it has near-zero volatility, designed to remain relatively stable when Bitcoin declines, suitable for institutional investors seeking income rather than price volatility exposure.

What are the core investment indicators of STRC?

STRC is a preferred stock instrument launched by Strategy, with key indicators: 11.5% yield, 2% volatility, nearly 4 Sharpe ratio, a nominal value of $5 billion, and an average daily liquidity of $224 million, already traded at institutional scale.

What specific concerns do critics have about the sustainability of STRC?

Critics question whether STRC’s 11.5% yield heavily relies on Bitcoin’s continued price rise and Strategy’s ability to finance under favorable conditions. If Bitcoin enters a deep bear market or the capital market environment worsens, this reliance on external financing to support the yield structure could face significant pressure.