Ivan on Tech analyzes the collapse of MicroStrategy's Strife preferred stock and its implications for Bitcoin
Ivan on Tech solo livestream discussing the decline of MicroStrategy's STRF ("Stretch") preferred stock, its impact on Bitcoin's price trajectory, and broader market dynamics.
Summary
MicroStrategy's STRF preferred stock instrument — which the host has been calling "Stretch" and warning about for some time — is the focus of a detailed breakdown covering the serious problems now facing Michael Saylor's company. He argues that STRF, which was promoted as a near-risk-free, money-market-like instrument paying around 10% yield, has now fallen to $75 from its $100 starting level — meaning holders are down 25%. Ivan contends that Saylor faces serious reputational and legal exposure due to how STRF was marketed, with the Rosen Law Firm having announced an investigation into potential securities law violations. He also discusses the broader impact on Bitcoin, arguing that Saylor has been the "buyer of last resort" for BTC, and that his inability to continue buying — or a forced sale of Bitcoin to fund STRF dividends — could push Bitcoin down to the $40,000–$50,000 range before a new bull market begins. Ivan frames this potential max-pain event as historically consistent with prior bear market bottoms, comparing it to the FTX collapse in November 2022.
Ivan also briefly addresses the Digital Asset Market Clarity Act, arguing it will have no meaningful impact on Bitcoin's price and serves primarily the interests of regulated crypto companies such as Coinbase and Gemini, before criticizing the community's tendency to construct bullish narratives around regulatory developments.
Other topics covered include: the Base L2 mainnet experiencing a temporary halt; Kraken's reported interest in acquiring a 15% minority stake in Aave Labs (distinct from the Aave protocol/DAO); Spark's introduction of a stablecoin liquidity layer on Uniswap; and the Stablecoin X/TLGY merger and NASDAQ listing.
Key Takeaways
FULL TRANSCRIPT
MicroStrategy's STRF ("Stretch") breaks its $100 peg
Ivan on Tech: Bitcoin is doing something very interesting right now. We're currently at $60K, holding on here at around $60K. It's quite okay — not that bad — but we're still below the 200-day moving average. And there is a big structural change now happening to Bitcoin. The buyer of last resort, our beloved Saylor, is in a very big problem. He has a big problem, and it's very difficult to fix.
On this channel we've been warning about Saylor's Stretch and all of the other Ponzi-like constructs he runs, because he has a few. As someone in the comment section pointed out, Stretch is not his only one. He also has a few more — there's also Strive, and a few others. Of course, "Ponzi" depends a bit on how you define it.
As we've seen, the last bull market was fueled by Saylor being the buyer of last resort — always buying and buying and buying. Now that that's likely going to change, for many reasons we'll be discussing, we need to ask ourselves: will the next bull market be affected? Are we now in a situation where potentially the next bull market will not start until maybe the middle of 2027? Let's discuss all of that.
First and foremost, look at the price of Stretch — it has now fallen to $75. As a reminder, this was supposed to be pegged at $100, because it was promoted kind of like a bank account where you put in your money and forget it. For that to be true, it needs to be at $100. When it is at $75, it means that the depositors, so to speak, have lost 25% of their money. And yes, technically it's never been exactly like a bank account, but it has been promoted like one. It's been promoted like a money market fund.
The biggest problem Saylor faces is more of a reputational and potential legal problem based on those promotions. When you look at the average person — this guy has 85% of his net worth in Saylor — investors of all different types have been buying Stretch thinking it's like free 10% per year. People have been mortgaging their houses. People have been doing all kinds of crazy things with Stretch, thinking it's super safe. And again, it was promoted as such. That's the biggest problem Saylor has.
Look at this. This was from last year, I believe. He said:
Michael Saylor: "That's the engineering. I give you the upside. You have no downside and I pay you a dividend while you wait to get rich."
Okay. Which is right? I mean, that's the engineering — I give you the upside, you have no downside, and I pay you a dividend while you wait to get rich.
The industry's repeated pattern of chasing free yield
Ivan on Tech: The crazy thing is that we fall for it. Like, as an industry, we fall for it over and over and over again. People in this industry have a kind of brain damage where we just love free yield. You tell me it's free yield — whether it is Celsius, whether it is Terra Luna, whether it is BlockFi or any other Ponzi-like construct — we love it. We're going to jump in with both feet, both hands, all in.
On this channel we've been warning, and it's good that you guys have been saved. People are messaging me every day. Steve wrote that he had $10K in Stretch and removed it way back in the past, saving his $10K. If he had not removed it, he would now be at a minus 25% loss and probably also mentally a prisoner to the situation.
Our community is good. If you guys are on this channel, you're good. But just understand — many people are not. Many people have their bare market savings, the money they saved in order to buy the next bull market, sitting in Stretch. I'm not kidding. Many of them have it in Stretch. Some people even called Stretch a cash equivalent — like, you have Stretch the way you have cash in a money market earning 10%. All of this is going to come back and bite us.
Legal action and the mechanics of the peg collapse
Ivan on Tech: Going through the situation a bit more — you know that he said he created Stretch from AI. He talked with AI and AI gave him Stretch. Now I guess he needs to fix it. Chat GPT has gotten him into this, so let's see if AI can fix it somehow.
There's one way to kind of fix it, and that's to increase the dividend. But the problem is, if you increase the dividend, the market can see that you don't have too much cash left, and the market may still dump the asset anyway. So increasing the dividend is not a guarantee it's going to repair the situation. But at least it's some hope. The market sees that he doesn't have too much money left, and so he will have to sell Bitcoin sooner or later if this continues.
And yes, there is already legal action being taken. The Rosen Law Firm has announced a massive investigation into MicroStrategy concerning securities law violations — basically that they promised it was going to be free yield, like a money market. Here's another clip where he said it has money-market-like stability with market-leading risk-adjusted returns.
For me, the biggest red flag was this ad — "Stretch your income" — where this lady said she put in her pension and stretched her income and now she's retired. The biggest red flag was when all of these Stretch ads came out, these AI-generated ads. When I saw those, that was the final red flag for me. I think it was around March.
How low can Stretch go? The distressed asset buyer threshold
Ivan on Tech: Now, how low can Stretch go? That's the big question. There's an interesting analysis here about when Stretch will become interesting for professional buyers of distressed assets, because there's a whole industry of institutional buyers that come in and buy assets that are in a kind of death spiral — not necessarily bankrupt, but where there's been a loss of confidence. They feel it's a panicked asset, price is cheap, and they step in and buy.
The question is: what price is low enough for professional institutional buyers to come in? Thomas, who actually worked with us in the past, says that what they are targeting is approximately a 30 to 35% run rate. For us to get to a 30-plus percent run rate, we basically need to go to $38. So just based on this — how far it can go before it's cheap enough for institutional buyers to step in and buy it as a distressed asset — it basically needs to halve yet again.
Right now, they pay $11 per share in dividends. At $75, that's too expensive for distressed buyers. But if it goes to $38, then $11 represents closer to the 30% yield they're looking for. Let's see when it's going to end.
And look here — Peter Schiff is grave dancing like there's no tomorrow. By the way, it's not really about grave dancing. What we're doing here is analyzing the situation. We've been warning from the start. I have no vendetta against Saylor or anything. It's just that it's been a very weird last few months where many people have been buying something they thought was something else.
Saylor's media absence and legal exposure
Ivan on Tech: Saylor's recent absence from media is not a coincidence. My guess is that his lawyers advised him not to make any more public statements — like, for example, the one he made where he said you have zero downside, you have all the upside, and I pay you a dividend while you wait to get rich. Maybe the lawyer said, "Michael, no more public appearances. No more 'zero downside, infinite upside, going to pay you a dividend while you get rich'" — because all statements in the media when you have a public company are potentially something that's going to be used against you. If you are too bullish and you misrepresent the facts, your shareholders will sue you. And that's also what's happening now with that law firm.
You remember that famous CNBC interview where the anchor was asking him, "So how are you going to do it? What if it falls? What's going to happen?" And Saylor said, "Don't worry, if it falls we're going to refinance — we're going to take out new debt and buy up our own stock at cheap." And she asked, "Refinance where? Who exactly is going to give you money?" And he was like, "Well, maybe it will figure itself out."
Let's see, guys. We don't know the future. Maybe Saylor will surprise us and pull a magic rabbit out of his hat. But he needs four rabbits — he has four Ponzi-like constructs. So he needs four rabbits, and he maybe has half of one.
What happens next — the paths forward for Saylor
Ivan on Tech: Even if he figures it out, everyone who is wrecked in Stretch right now — at a loss and just expecting yield — this is a lesson you have to learn. Because even if he figures it out, this was not what you signed up for. That's the biggest lesson here: sometimes you invest in something and it goes crazy, and you have to be honest with yourself. It's really not about whether he can make it back. You made the decision based on this being risk-free 10%. You did not make the decision based on going down 30% with Saylor potentially having to beg to return.
The most important thing is to be honest with yourself. You can do mental gymnastics — Saylor is amazing and he's going to make it all back, which could happen, I don't know — but you still have to realize it's not really about him making it back. It's about you being in a very bad situation that you did not plan for, and how you avoid it in the future.
So what's going to happen next? There is a big risk of them selling Bitcoin. The likelihood of them going bankrupt is very low because they have structured Stretch in a way where they really don't even have to pay anything. But the problem is everyone gets wrecked — everyone who trusted Stretch gets wrecked big time. Their ability to raise further funds is very limited, and that's the big damage to Bitcoin overall, because Saylor is the buyer of last resort.
Bitcoin losing the buyer of last resort will suffer a much harder bear market than ever before. Strategy will have no choice but to sell a significant portion of their holdings to cover enlarged dividends. The whole idea with Stretch was to get money to buy more Bitcoin. But now you have to sell Bitcoin to pay Stretch, which was meant to be used to buy more Bitcoin. This will bring Bitcoin price even lower — potentially to below $20K figures, according to some analysis I've seen. I'm reasoning through it, but I'm not necessarily agreeing with it. This would not allow Bitcoin to repeat an all-time high after the next halving.
By the way, something very interesting would be if Saylor just said, "It wasn't supposed to be pegged at $100." Just like he said, "Oh no, I didn't mean that we would never sell our Bitcoin. I meant that you should never sell your Bitcoin." You remember that was like a week ago — he said, "Guys, you misunderstood. I said that you shouldn't sell your Bitcoin. I can sell my Bitcoin." It would be a bit crazy if he came out and said, "Guys, I didn't mean it was going to be pegged at $100."
The max-pain event as a bull market signal
Ivan on Tech: So the question is: are we going to go to $20K? Is this the old Bitcoin false narrative, and will Bitcoin just be a niche asset? Okay, okay. The market has spoken. This is our signal, guys. This is our signal. We've been waiting for it, because each bear market needs to have something go broke. If something does not break, the pain is not big enough for us to have a nice Valhalla in the coming bull market.
If we can actually have a max-pain event — and listen, I'm a very sympathetic person — but people that don't listen, they become the sacrificial ship by their own decision. In a bear market, you need some kind of sacrifice. Last time it was FTX. By the way, I was partially part of that — I got a bit of ETH stuck in FTX. But I actually think I even made money from the FTX bankruptcy because they took my ETH, converted it to dollars in the bankruptcy, and then ETH went below that price. So I think I even made money from the bankruptcy. But you know, I was part of the sacrificial lamb — not a big amount, but still.
Celsius was another sacrificial event. And maybe this time it is Stretch. Because when you have a max-pain event — something big breaking, media hates Bitcoin, everyone says it's a niche asset that's never going to come back — remember after FTX how bad it was? It was crazy bad. And then that was the bottom.
Should something happen here — should we go to like $38, should many people get super angry, should the media start speaking about Saylor, should Saylor get sued (which he kind of is right now), should Saylor maybe sell Bitcoin into a low-demand market and we go to $40K — man, it would be so nice. It would be the craziest bull signal in history. That's the last piece of the puzzle that we are missing.
And if you think about it time-wise, it's crazy how the timing is the same. FTX collapsed in November 2022 — that was the bottom. This bear market started in October. So if something happens to Saylor with Stretch around October, let's see. But just see it as a big fat opportunity, because that's exactly what it's going to be. Bitcoin is not going to die. This industry is not going to die. We've had worse. You can argue that FTX was way worse than whatever the Saylor Stretch situation is going to be.
Why this bear market's pain hits Bitcoin maxis specifically
Ivan on Tech: The interesting thing with Stretch is that it's going to almost exclusively affect the Bitcoin maxis. I'm not sure this has ever happened before. With FTX, it was the altcoin traders — all of us who trade altcoins using leverage. But this one, to a large extent, is the Bitcoin maxi investment. You buy it and you get yield on your Bitcoin.
I don't really understand how Bitcoin maxis are okay with it. They're not okay with DeFi — they think DeFi is a scam, DeFi is a Ponzi. But to give money to one guy? That's okay. That's okay. It's like when they pitched me the Lightning Network and the Lightning Network was all centralized channels — it wasn't that you create your own, you just use an app and the app has a centralized Lightning channel. There's some kind of bug in the Bitcoin maxi brain which makes them accept crazy centralization that goes against their ideology, but they're so proud of it anyway and they somehow make it work in their head. I don't understand how they make it, but they make it.
Tom Lee's similar ETH treasury problem
Ivan on Tech: Tom Lee, while all this is happening — I haven't seen him make too many statements about his strategy because he's in a very similar situation. Strategy has currently $14 billion in unrealized losses and Bitmine has a $10 billion unrealized loss. I think these are the biggest losses in trading history overall.
And again, I'm not grave dancing. It's crazy to me that they had this strategy. The way they've been doing it, they literally top-bought. It was not hard to see the bull market was ending. We did this analysis in October. They decided to top-buy.
Tom Lee is in a bit better position because ETH has a bit of yield, but not too much better, because Tom Lee has promised his investors more yield than he gets from ETH staking. So there's a mismatch there also. If he had just promised the same yield, okay, I understand — it's the same yield. But he offered more yield. So in his preferred stock — I don't even know what it's called, but he announced like a month ago that he wants a preferred stock and the yield is going to be higher than the yield he gets from ETH staking. So let's see.
Summary of the Saylor situation
Ivan on Tech: Let's summarize what we just discussed. Saylor is not going to go bankrupt — everything is structured so he does not go bankrupt. Stretch can go down to the $30s before institutional investors step in and buy it as a distressed asset. If you are a Stretch holder, you've been taken for a ride you did not intend to go on, and even if it recovers to $100, just see it as a lesson.
Should Saylor change strategy — let's say he starts selling Bitcoin to raise money — he will sooner or later have to do it. Why? Because he cannot really raise via Stretch when it's below $100. For him to do some kind of new instrument, some kind of new debt, is going to be hard because his reputation is so damaged now. Raising money is based on reputation and hype, and if you don't have it, it's very hard to get credit buyers. Digital credit buyers just want a kind of treasury money market thing. They now see that it's not a money market. It's very different.
Cash reserves are running out. He had like seven years of runway at the beginning of the year. Now it's less than a year. If he raises the dividend, it's going to run out even faster. So he will need to make some decisions. He could sell a lot of Bitcoin — that would put the price chart down a lot, but I would count it as our signal to be super bullish. If it's big enough, if he says "we sold $5 billion, we're going to sell $10 billion" — I would count that as the event where you know the bull is coming after Saylor basically exits at the bottom.
Number two, let's say he retires Stretch somehow — he says the stock is retired, he can't really pay this dividend, he just retires it. That likely will have to be coupled with selling Bitcoin. Somehow retiring Stretch would also be a signal that the bottom is likely in, because we have a restructuring of a lot of leverage and Ponzi-like mechanics. The bear market has to clean all of the crap — all of the greed, all the overleveraging. Then we can go into a new bull market fresh.
Bitcoin market structure — 53% of holders at a realized loss
Ivan on Tech: Moving on — you now have a situation where 53% of all Bitcoin in circulation is at a realized loss, which is good. This is the kind of numbers you want to see towards the end of the bear, where most people are actually at a loss. You want to see most people at a loss — that's really when you have fantastic returns ahead.
Hyperliquid — Multicoin Capital publishes major endorsement
Ivan on Tech: Moving on — Multicoin Capital has published a big paper on Hyperliquid. Again, HYPE — we've been very very bullish. HYPE is now one of the large positions in our liquid hedge fund. We've been accumulating aggressively. Multicoin says they've been accumulating aggressively since February. They're no longer only about Solana — now they're also about HYPE. The thesis is that Hyperliquid is the everything derivatives exchange: a vertical integration of order book matching at centralized exchange speed and execution. It just confirms our thesis.
Base L2 mainnet halt
Ivan on Tech: Base mainnet was halted yesterday. So if you love L2s and you love minting things on Base, you did have a bit of a halt yesterday.
Aave potentially acquiring a minority stake from Kraken
Ivan on Tech: Next — Aave is potentially going to see Kraken buy a minority stake, 15%, with Aave valued at $385 million. It's very low — how can it be so low? That's very interesting. There are lots of discussions around Aave, so I want to clarify a few things.
Stani is saying there's no way they would sell Aave at a 70% discount. 100% of Aave protocol revenue goes to the Aave token — this was established in the "Aave will win" proposal. No protocol or product revenue goes to Aave Labs. Aave is currently generating $134 million in annualized revenue that goes to the DAO, belongs to Aave, to the coin.
So what's going to happen? Are they going to sell or not? Also, Kraken can just buy from the market. They can buy from the market, but going to pump the price too much? In a bear market, you can put $60 million in slowly — it's not going to pump the price. It's not a lot. You can slow-accumulate. No problem.
But why would they buy the company? If they buy the coin, just buy from the market. Let me see here. Okay, so the deal would see Kraken investing for the token — it's 15% in the company. Then it's different. Then they have to sell the company. But Stani is saying they will not sell Aave, but you can buy from the market. So they can still buy Aave from the market, no problem. Maybe he's saying it doesn't make sense to buy the company because it's all about the protocol. Some moves are potentially happening — Aave is going to be merged somehow with Kraken in some way.
The Digital Asset Market Clarity Act — a fourth-tier narrative
Ivan on Tech: There is news on the Digital Asset Market Clarity Act. I don't really follow it closely, guys. It won't affect the price. People think it's going to affect the price, but nothing is going to affect the price from this. The only people it's going to affect long term are Brian Armstrong and Coinbase, Gemini, all these crypto companies — it's good for them. The space is more openly regulated, you're now kind of acting as a bank, you have many privileges, and the US consumer has protections. But for the price? Forget it.
Another thing that blows my mind — and there are a few things that blow my mind in crypto. One, as you know, is that if you tell the average crypto guy he can get 10% yield, he's going to give you his life savings. It blows my mind, and we do it over and over again. We just had it with FTX, with Luna, with Celsius, and now yet again with Saylor.
But another thing that blows my mind is how we can produce a bullish narrative out of nothing. It happens all the time. For example, the Clarity Act — big shout out to Ilo Trades, but he made a video about the Clarity Act and it got so many views. I was amazed. Do people really think the Clarity Act is going to start the next bull market? I mean, I'm a bit slow when it comes to these kinds of narratives, and it takes a while for me to see that the average person really thinks the Clarity Act is going to start the next bull market. I would have so many more views if I just leaned into these narratives. "Guys, Clarity Act — let's go. New bull market." But that's also why the average player is not too great at this — they think the Clarity Act is going to save them. It's not going to save you, guys. Only the bull trend is going to save you.
Spark and stablecoin liquidity on Uniswap
Ivan on Tech: Look here — this is Spark. Some DeFi stuff. Every bank, fintech, and payment provider is launching stablecoins, but every new stablecoin fragments liquidity. Today Spark introduces the Spark FX. Basically it's some kind of liquidity layer on Uniswap where all of the stablecoins will share liquidity, which is very important. Sometimes you have one stablecoin and you want to switch to another. It's good that it's now built into Uniswap, because in the past you had to go to Curve for big amounts — if you want to swap big amounts, you couldn't really trust Uniswap to give you best execution. So it's good that they figured it out on Uniswap.
And then there's another one — Stablecoin X, described as the first pure-play treasury company focusing on the Ethena ecosystem, has announced the closing of its business combination with TLGY and will begin trading on NASDAQ. So basically you will have a new treasury company for Ethena. But what are they going to do — buy Ethena and hodl Ethena? Be careful — if it's like Stretch, don't buy it if it's strange.
Also, when companies merge, you don't call it "closing a business combination." You say merger. You have concluded the merger. You have not "closed the business combination." Anyway, they've merged with TLGY and will begin trading on NASDAQ.
Q&A — Bitcoin bottom target, Stretch outlook, and portfolio positioning
Ivan on Tech: Now let's go to Q&A — questions, answers, debates, discussions.
Where does your humble self see the Bitcoin bottom? The current situation does not change my view on the Bitcoin bottom. I think it's going to be somewhere in the buy zone — either at the $50s or $40s, somewhere in there. I don't think we're going to go way lower. The current situation with Saylor is not changing my Bitcoin bottom outlook. I don't think the timeline has changed. I still see the same bottoming target at around $40,000 to $50,000.
For us, it's just about playing it in the most risk-reward effective way where the odds are stacked in our favor. Buying at around the 200-week moving average is good. Buying below the 200-week moving average is good. So just DCA here and then it finds a bottom somewhere. And if you want to be super sure that the bull market is back, just buy when it flips bullish on the money line. Currently it's at $84K, but as we go lower, that flip level is also going to go lower. Within a few weeks it could be in the $70s. Buying somewhere here is cheap — Bitcoin is cheap. It could get cheaper and go to $40K, but the current situation with Saylor does not change my outlook at all.
Someone is saying MicroStrategy is fine and Stretch is total bollocks — check the facts. Okay, listen. Maybe it's fine. If they sell Bitcoin, the question is not whether it's fine or not. The question is: you bought it, you thought it was going to be at $100, and now you're down 25% in your portfolio. That's it. Even if it recovers, just see it as a lesson where you got taken for a ride while you thought it was zero downside, infinite upside, and you get paid yield every month — like a money market. And by the way, the guy saying it's fine — isn't it the same guy we just read about who has 85% of his net worth in Stretch? Of course he's going to tell you it's fine, because he himself needs it to be fine. Did he warn you it was going to be down this much? Because now it's a new situation.
Do what you want. I'm telling you how to do it properly, and then you do what you want. We've been warning about Stretch all along. It's not part of my strategy to go down minus 25% while thinking it's going to be stable at $100. Maybe you get rich from buying this and it goes up — congrats to you. It's definitely a trade you can make. But I don't think it's a good risk-reward. You can make way more in altcoins. You can make way more following the trends. It's a very bad risk-reward for me. I'm not touching it.
The most sinister thing is that this is the money people had to buy the new bull market with. They saw it as a cash equivalent — "I'll put my money in Stretch, get 10%, it's liquid in and out, it's like a bank account with yield." Now you're in a position where it had better come back. It's a very bad position. Just admit that to yourself — not to me, to yourself. You need to admit it to yourself.
Can ETH fall out of the top three? Yeah, it could. Nothing is a god-given right in crypto or in any market. It can for sure fall out. ETH is at $190 billion market cap. BNB is at $76 billion. Solana is half of BNB — that's a bit of mispricing in my humble opinion. Hyperliquid is at $16 billion. So Hyperliquid could 10x and still be below ETH. Could ETH fall out of the top three? I think it's possible, but it's hard. Nothing is a god-given right.
The video playing and laughing seemed like grave dancing. Or it's just that it's been so ridiculous that when you look back at it, it's super clear and it's a nice lesson to see what kind of trance this industry can fall into. Sometimes we believe in such dumb things that you look back and you can just laugh. But in the moment, when Saylor says you have no downside, you have all upside, and I give you monthly yield while you get rich — in the moment, it seems legit. The only thing I can do is laugh at it in hindsight and hope that you guys understand what kind of collective mania we sometimes believe in this industry.
It's very hard to reach people in the moment, because half of it is that they really need the money — they really need the money, so they trust anything in the bear. You can give them the biggest scam, it gives 10%, they buy it. And the other half is that we for real sometimes believe in the magical money glitch — the infinite money glitch. It's a real thing that even the biggest Bitcoiners believe in. Saylor is going to have a black hole that sucks in all of the fiat. The digital hornets are uniting and assembling. So the only thing we can do now is laugh, and be prepared for the next cycle.
I don't think he's going to go bankrupt. He structured Stretch in a way where he doesn't even have to pay anything — it's a very issuer-friendly instrument. So he is going to be okay. Buyers of Stretch who trusted him — they're not going to be okay. And Bitcoin holders also may not be okay, depending on how he prioritizes. He has a few options: try to retire Stretch somehow, or sell a bunch of Bitcoin to pay them.
Where does your humble self see the Bitcoin bottom? Same as before — somewhere in the $40s to $50s. Just DCA around the 200-week moving average and wait for the money line to flip bullish. That's it.