STRC 回来了吗？Apyx 的 Parker White 谈下一步，以及将 STRC 代币化用于 DeFi

And so, despite Bitcoin having been around for decades now, we've got a problem: credit investors just can't touch Bitcoin at all. The convertible bonds that Strategy issued were the very first credit instruments of any kind that traditional investors were able to access.

But the convertible bond market is fairly niche. There are about 100, maybe 150 players there. It's this crossover equity-debt instrument, and Saylor's ultimate goal is to continue taking steps to push into that credit realm.

The ultimate goal is a AAA rating, where they can issue 30-year corporate bonds at maybe a 200-basis-point spread to the 30-year Treasury rate. But obviously, there are many steps that have to be taken to get there.

Parker, thank you for joining us. How are you doing?

I'm fantastic. Thanks for having me.

Yeah, good to have you, man. We've followed Stretch since its inception, I think, back in June 2025. We were following it in our newsletter, and it just seemed like this really interesting and experimental new product. We've since followed it with the DeFi components that have come online, and we've essentially followed it through its ups and downs.

1. What is STRC, why it exists, and what’s the end goal?

We wanted to bring you on to bring us up to speed on the state of Stretch and talk a bit about Apex. I want to know: Is the original Stretch vision still intact, or is this something new now, something different? We want to talk about what happened with Apex as well and what you fixed. I want to know, personally, what metrics are important to assessing Strategy's health going forward and what other headwinds might be out there for Strategy that maybe people aren't seeing—or maybe they are—but just talk a little bit more about those.

2. From fixed income to building Apyx

There's lots more, of course, but first we should get into your background a little bit. I believe you had a TradFi background and transitioned into crypto, but maybe just tell us a little bit about that and how you ended up building Apex.

I started out, as you mentioned, on the TradFi side. I got a very standard finance degree and went on to get my CFA. I worked as a portfolio manager at about a $2 billion investment firm, mostly doing fixed-income trading—short-term stuff, commercial paper, agencies, and taxable munis. We managed money for a lot of governmental entities.

I did that for a couple of years and then got into crypto in 2017. Growing up, I was homeschooled and had a bit of an alternative educational background. My dad has an Austrian economics lean to his worldview from the finance side, so from a very early age, I was primed to get Bitcoin. I actually read Hayek's The Road to Serfdom when I was 12 years old. My dad handed it to me outside of school.

In 2017, I got into some ICOs and so on, but in 2018 I really started getting into Bitcoin, and it clicked pretty quickly for me. At the end of 2018, I got out of TradFi, joined Kraken, and was at Kraken for about 6 years before leaving early last year to launch DTV, which is a Nasdaq public company, kind of a MicroStrategy-type clone built on Solana. We were the first non-Bitcoin debt. Then I launched Apex early this year, so that brings us to today.

Parker, I want to talk more specifically about Apex, but more upstream of Apex is Stretch by MicroStrategy. We've thought of Apex as more of a distribution-type protocol for getting Stretch exposure, among other types of dividend-paying real-world assets.

One of the themes we've been really leaning into and doing more research on through the podcast is the tokenization of these real-world assets. We believe this is going to lead to at least tens of trillions coming on-chain in the next few years, if not hundreds of trillions long term. One of those early examples is this ability to get exposure to Stretch.

Anyway, can you explain to our audience—maybe summarize—what the Stretch offering is? Why did Saylor and the team at MicroStrategy create this offering?

Funny enough, when Jack Mallers announced their new product yesterday, I was reading through the comments on the tweet. People were asking, “Why is the rate so high?” And Jack was like, “It's really hard to find people to lend money against Bitcoin.” I was just like, “Ta-da! This is why Stretch exists.”

Strategy has evolved since it got into Bitcoin, and Saylor, admittedly, has been learning along the way. Kudos to him: given his age and wealth, he is still very much a learner. We've met with him many times in person, and he's pulling up our dashboards and asking, “What does this metric mean, and what does this metric mean, and how do we build a real-time API feed?” So he's a learner.

I think what he fundamentally understands is that there is a significant amount of capital in credit markets and credit instruments. This is by mandate and by design. There are investment policy statements that are ratified by boards and trustees at large pensions, governmental agencies, groups like CalPERS, and sovereign wealth funds, and they have very specific mandates for buckets of capital.

Credit has a far larger corpus of capital around it than equity markets, and certainly than alternative asset markets like Bitcoin, gold, and commodities. If we want Bitcoin to become this digital capital that underpins the entire global financial system and the entire economy—if we want it to reach $1-million and $10-million coin levels—it has to be fully integrated into finance.

To do that, you need a credit instrument, or credit instruments, plural, to tap into those pools of capital. Despite Bitcoin having been around for decades now, we've got a problem: credit investors just can't touch Bitcoin at all. The convertible bonds that Strategy issued were the very first credit instruments of any kind that traditional investors were able to access.

But the convertible bond market is fairly niche. There are about 100, maybe 150 players there. It's this crossover equity-debt instrument, and Saylor's ultimate goal is to continue taking steps to push into that credit realm. The ultimate goal is a AAA rating, where they can issue 30-year corporate bonds at maybe a 200-basis-point spread to the 30-year Treasury rate. But obviously, there are many steps that have to be taken to get there.

Can I pause for a quick minute? My baby is screaming right now, so I'm going to go grab her and take her to my wife.

Oh my God. Yeah, go ahead.

I guess you're the DeFi Dad, so you get it.

Yeah, you're good, man. You're in good company.

With this whole digital-credit narrative that Strategy has been developing, it really started with the convertible bonds and is extending to the preferreds, but this is not the end-all, be-all. There are multiple steps here.

Ultimately, what Strategy is and what they're pioneering is a new era of digital banking. They wouldn't call themselves a bank for lots of various reasons, but they function as a quasi-bank-type entity.

And there are others that are following in their footsteps. In fact, we talk about all the DATs. You've got many large DATs—some on Bitcoin, some on ETH, some on Solana, a few others, and some other assets. Ultimately, this is going to be the cohort of entities that bring credit instruments backed by Bitcoin and a few of the other major digital assets to the credit market. Stretch is just the first step, or maybe you could call it a second step.

It'll, I think, always be around, and it's going to grow significantly. But I think there are going to be future products and future iterations to build out the entire credit stack for Strategy. Eventually, many other companies following in their footsteps will put their own flavors and spin on it.

3. Saylor is still Bitcoin’s CMO

Yeah, I think that's an interesting way to view it, and I hadn't thought about it this way. When you map out the convertible debt into some of the other preferreds that he started with, and then into Stretch, it's very conceivable to think that there's another iteration coming that might even have more product-market fit than Stretch. I hadn't thought about it that way, but I want to speak to Stretch alone here for a minute because I feel like it was pitched as a lower-volatility instrument that should trade close to par, close to this $100 mark.

It was never advertised as, “This will always be at $100,” but small deviations were sort of built into the product and, I think, into the product knowledge of the people who were buying into it. But this past month or so, we've had pretty massive deviations, and I think there's a big cohort of people who maybe bought into it who are feeling like, “Well, this isn't what I thought.” I want to ask you: do you think the original vision of Stretch is sort of dead or completely broken? Or do you think Stretch has just evolved into something different that will be more volatile than people originally thought?

Yeah, I think Saylor put this well. I was looking at some of the marketing pieces, and I can't remember if this was in an interview or what, but he mentioned something about 6 to 12 months: “Park cash that you might need in 6 to 12 months into Stretch.” That's very different from money-market cash that you might need tomorrow, right?

If you look at the chart, Stretch has had a few other drawdowns, and this is certainly the deepest and certainly the longest, but it's only been about a month and a half, somewhere around there. To say that the narrative is dead, we'd really need to see 6 to 12 months of Stretch trading below, let's call it, 98 or 99 or something like that. Stretch is a great example of something that went below par, but it's kind of—I mean, it's not back to par yet, but it's at 97 or 98, somewhere around there.

I think it's a little early to say that it's dead, dead. Investors may have erroneously thought that it was always going to trade right at par, and if there were any kind of drop, it was just going to return to par within a couple of days or a week, like it had done historically. But I think this was always designed to have some volatility built in, and this is a little bit of a deeper drawdown. It's the deepest and the longest that we've seen historically, but again, I think let's wait a couple of months to start casting judgment and saying the narrative is dead.

It's really early days for this product. If people had gone into it eyes wide open, understanding that, “Hey, this could drop below par for a 6-month period,” no one would be upset. But this thing hasn't even been around for a year, or I guess it's right at the 1-year anniversary. It's so new that people went in with maybe some wrong expectations. Admittedly, maybe Strategy gave them some slightly wrong expectations.

I mean, if you read the fine print on everything, you'd be good, but who reads the fine print, right? People are just going to listen to what Saylor says: “Hey, it's like a money market,” or something. Well, it's kind of like a money market, but it also has some very important differences from a money market. So I think the Strategy marketing could be tweaked around it.

Ultimately, the product remains. I don't think a whole lot has changed in terms of the design and the structure, and I think some of this is just a symptom of the bear market. We may look back and be like, “Yep, this was the bottom.” The Stretch panic was the bottom of the bear market. Maybe not, but that would be the type of event that you would expect a bottom to have: some type of crazy breakage of a product.

4. What is Apyx? How does it distribute STRC exposure in DeFi?

Last time, it was FTX or Luna. This time, it's like, “Oh, this thing.” It didn't break, but it certainly stretched, right? Bent. So, I don't know—just some thoughts there. I wouldn't say that it's dead, and I wouldn't even say that going forward volatility is going to be much higher. It's always going to be moving around 10% to 20%. I think it can get back to par and trade closer to par in the future. It might just take a little bit of time.

Apex itself is clearly tied to Stretch as an offering. Can you explain at a high level what Apex does, what solution it brings to the market, and what's the innovation it's bringing to the DeFi space?

Ultimately, Apex—it's kind of in our name, APYX, right? APY: We are a yield-focused platform. The first product that we launched, and our flagship product, is based on these variable-rate, nonconvertible preferreds. We hold Stretch, we have held SEEDA in the past, and we intend to hold more SEEDA in the future. We believe most of the major DATs will ultimately issue a variable-rate, nonconvertible preferred.

I know Bitmain did their recent one at a fixed rate, but it's not really trading much. I think they'll eventually do one of these variable-rate ones. So we'll hold this basket. We've designed this product in a very crypto-native, crypto-friendly way.

A lot of the RWA tokenization platforms just take the asset and stick it on-chain. Sometimes they do it in a permissionless manner, but most of the time they do it with some KYC whitelist procedure, which really limits the usability. What we did was say, “Okay, let's take what crypto knows and loves”—things like the 2-token model and points—and there'll be more things to add on to that. Let's package these RWAs—in this case, the variable-rate, nonconvertible preferreds—in a package that crypto knows and understands, and bring that to market.

I think the reason we had a lot of product-market fit early on—we grew and added about $400 million in assets in a month and a half—was because, first off, digital credit and Stretch were just really hot. But I think even at a more fundamental level, the yield sources in crypto to date have, for the most part, been very opaque.

You've had things like the basis trade and Ethena. It's like, what are they actually doing? We get these balance snapshots, but they're self-attested; there's no auditor. Tether famously sort of has audits now, but they're not really full audits. Then these other alternative forms of yield, things like reinsurance and private credit, are opaque and sometimes illiquid. That's kind of the antithesis of the crypto ethos.

For us, we're like, “Hey, we can take fully liquid assets, put a dashboard around them, put them on-chain in a package that Joe users know and love, and provide a pretty interesting alternative to some of these other stablecoins that may be illiquid or opaque.”

Going forward, we're not just going to be a single-product, single-asset issuer or platform. There are many other flavors of digital credit that would be interesting to folks—maybe things that have more cash in the mix, maybe things that actually have leverage built into the mix. There are also going to be other assets that people are interested in getting access to.

As you see this convergence of TradFi and DeFi, there's going to be a bridge that needs to be built, and there are lots of builders on the bridge. We've partnered with xStocks quite a bit. We're just one of these builders helping to bridge these worlds and ultimately bring billions, then tens of billions, hundreds of billions, and trillions on-chain, focusing really on credit markets and yield, essentially.

5. What happened with apxUSD and what’s improved?

Parker, I want to ask more about these other assets that you're thinking through. But first, Apex's TVL—you mentioned it exploded. I think it went north of $500 million at one point as this whole space was really rocking. To your point, crypto-native yields have been drying up, and the space has been looking for other yield sources, right? You've mentioned RWAs and private credit, and Stretch was one of those.

We had this meteoric rise, then we had this depeg in the Stretch product, and obviously that filtered through to the other on-chain Stretch products. Walk us through what happened there, what under the hood wasn't working properly for Apex, and any other mechanisms you've changed or improved since going through this period.

So, in the early days, when we launched, we always understood that STRC could have these depegs, but we thought, “Hey, this might be a bit of a problem in 6 months or longer,” so we had a little bit of time to build out the infrastructure around minting and redeeming, market making, and all of that to help keep the underlying basket and the market price of APXUSD tethered.

Obviously, there’s a big challenge there that all our RWAs deal with, which is the mismatch in liquidity. If you’ve got a stock—SpaceX stock, or any other tokenized SpaceX stock, for example—it only trades on the Nasdaq, and that’s 8 hours a day, or whatever, 7.5 hours a day. The problem is that crypto is 24/7, 365 days a year, so how do you handle minting and redeeming on the weekends and overnight?

As STRC started to come down, we really pivoted our engineering focus to solve a lot of these problems. We’ve pushed off some of the new-chain expansion, new-ecosystem expansion, and new-product launches, and really focused on operational resiliency. That means redundancy around market making, the ability to make markets overnight, and onboarding a significant number of new market-making partners.

Platforms like Lyra and Hyperliquid now offer Stretch perps, which is fantastic and great for hedging. Our partnership with xStocks has also allowed us, in a few cases, to do in-kind redemptions. Someone gives us APXUSD, and we actually give them STRC xStock, which eliminates the price risk for us.

We’re doing a bunch of things there, and I think you’ve seen noticeable improvements in the deviation of the APUSD market price from the underlying value, including on the weekends. In the early days, that wasn’t fully there, so I think that’s the biggest area of focus and improvement.

We’ve also made some clarifications to some of our definitions in the dashboard and in the marketing, along with a couple of other things we’re still working on. I’d say maybe 75% of the work has been done. We have a couple more releases over the next few weeks that will get us to that 95%–100% level of operational resiliency. Then we’ll get back to expanding to new chains, launching new products, and that kind of thing.

6. What can Strategy do to get STRC back to par?

Parker, I have more questions for you about Apex, but I keep going back to STRC. I always think it’s not possible for Apex to fully realize its vision without STRC trading closer to par and regaining confidence from investors in the market.

Maybe it would be good to talk about what options you see MicroStrategy and Saylor having right now to get STRC back to par. More specifically, are there any metrics that we should be paying close attention to? My thinking is that as STRC gets closer and closer to par, that’s clearly really good for Apex because, even though you could be adding more assets to back APXUSD in the future, for right now, STRC makes up the bulk of that backing.

I’m just trying to think backwards here: what needs to happen next on the MicroStrategy side for this situation to get better?

The Strive team has really laid out a pretty interesting road map. In some cases, they’ve been the testnet, if you will, for STRC’s mainnet. Some of the things they’re doing are pretty applicable.

First off, you’ve got the daily dividends. That’s really powerful because it makes it more difficult and more expensive to short. Right now, with Strategy—even with it now going to buy monthly or semi-monthly dividends—there’s still a 2-week period where, if you want to move the price as a short, the cost to short is effectively zero. As long as you cover before the dividend is paid, the borrow rate is about 60 basis points. That’s a rounding error to zero. Moving to daily dividends would certainly increase the cost to short. That’s one thing.

The other challenge these instruments have is that they’re actually great to short because there’s an implicit lid on the price. The companies are just going to floor the ATM right at $100. They’re going to sell as much as possible at $100. So, if you’re a short, that’s your maximum downside.

If you knew for a fact that the US government would buy all the Bitcoin at $61,000 per Bitcoin—all of it—you’d max-lever long right above that, because there’s no way it’s ever going below that. You kind of have that same situation with STRC.

What Strive did was say, “All right, under abnormal market conditions, we won’t run the ATM.” That’s akin to the US government stepping back and saying, “Hey, there might be some situations where we don’t buy Bitcoin at $61,000.” Then you’d think, “My leveraged long—I’d better not go too crazy here, because it might drop below that.” As a short, injecting that uncertainty is another potential avenue.

The problem that Strategy has is that it has a company call at $101. It can buy all the preferreds back at $101, so STRC should never trade above $101, even if Strategy weren’t running the ATM. Strive, though, has a much higher level. I think it’s $120; it might be $110.

Strategy, in my view, should come out and say, “Yep, we’re going to increase that company call level to $110 or $120, and there may be periods when we don’t run the ATM and let the price get up that high.” That would introduce some upside volatility. It would mean that volatility is maybe a little bit more permanent, but nobody cares about upside volatility. Everyone loves that.

I think those are the other things they can do: the daily dividends and the upside piece. Beyond those 2 things, unfortunately, it’s a function of time and marketing.

There’s probably—I’m making up a number; I don’t know what the number is—$1 billion, $500 million, something like that, of capital that just wants out. These are people who top-ticked in May, and they thought, “Oh, sweet, 13%.” Now this isn’t what they signed up for, and they want out.

Strategy basically has to drum up new buyers to pick up that old stuff. I guess it could go away and start doing buybacks, but I don’t think it’s going to do that. It needs to work through the supply by getting out there, telling the story, letting the Bitcoin market firm up a little bit, and letting some of this complete and total panic around MicroStrategy blowing up and selling all its 800,000 Bitcoin subside.

It’s a little bit of a time-and-marketing game as well as the third pillar of the stool: bringing more buyers in, setting a floor, and giving people more confidence. Ultimately, I think it comes down to those 3 things—the daily dividends, removing that $100 cap, and then marketing and some time. Together, those things will help support the price.

Again, I think Sayda is the perfect example. Strive has half the Bitcoin coverage that Strategy has. Its instrument is far less liquid, and the company is far less well known, yet it’s trading pretty darn close to par. I think it would be trading at par if it weren’t for STRC.

There’s a lot of good stuff in there. It’s hard not to notice the operator execution from the Strive team. They’re kind of like a smaller ship that can maybe move faster, while Strategy is a bigger ship with a small rudder and maybe can’t make as quick pivots. But absolutely, getting to daily dividends seems important.

You mentioned time, and there’s this other element to it. I don’t think this is a good fix or a good way to look at people who are feeling some pain, but say you did buy in at $100 and it’s trading at maybe $85. There is a time component where the yield can get you back to your principal. I think that’s roughly around 15 months or something like that. By any means, it’s not a good fix, but price appreciation would also help you greatly there and shorten that time period.

One thing that I keep coming back to, though—where I really got nervous, and I’ve never held STRC; I’ve just been fascinated by it—was where I really started seeing things fall apart. Everybody started looking at the USD dividend reserves. If you go to the Strategy page, it’s right there in giant, I don’t know, orange or black letters, and it got down to 9 months. I think people were just asking, “How is he going to keep doing this?” Then it got down to 6 months.

It’s now at close to 18 months, something like that. He’s shored that up, and to me, that’s one of the biggest user-confidence numbers I see there. He’s got money in the bank ready to fulfill this obligation for a good, long chunk of time.

Personally, I’d like to see that get even higher, maybe up to 24 months. I would love to see him keep building it. I’d also love to see a bit more savviness on the operator-execution side of Strategy, because I think this whole thing requires threading a needle constantly.

7. What else could be used to back apxUSD and apyUSD?

And you really have to be on point with it. I want to just get back to Apex quickly here, though. You're talking a lot more about SEDA. I have a feeling that's going to become potentially a bigger part of the portfolio, but I don't want to put words in your mouth. You also mentioned some other products that you want to bring into the backing. Can you give us some examples of other things that you're looking at that would maybe back up Apex?

Yeah, so I don't want to share too much before we launch anything, but I think there are kind of 2 components here. One is improvements to the backing, or changes to the backing, for APY and APXUSD itself. So, a little more diversification, maybe a little bit of a different cash mix. No, we're not going to do anything right now. We're not going to lock in any permanent losses. But once stETH is back close to par or at par, then we can make some changes.

And then there are actually just straight new products that we can launch—new assets, new tokens backed by different things. We recognize that, just looking at finance in general, there are so many different products and so many different options out there. Investors want diversification. Investors like different risk profiles. Investors want to trade between things.

And so we think we can bring that to the market in a way that's not really being done well today. These would be potentially additional flavors on the digital credit narrative. There's a bunch of things there, but I won't get into specifics. And then there are potentially even some things outside of the direct digital credit narrative that might make sense.

8. Earning back user confidence in Apyx post-STRC’s depeg

Parker, in light of all the challenges that stETH and MicroStrategy have faced, what are you focused on right now to win back user confidence in Apex?

Yeah, so I think we talked a little bit about this earlier—some of the operational improvements—but it's really around better explaining and providing transparency around how Apex is supposed to work. So, improvements to the docs, improvements to the dashboard, case studies on how different facets work: How does the overnight liquidity work? How does the redemption value versus the collateralization ratio work? How do all these things work together?

And then execution against that. There were a few instances where, overnight, the price of Apex traded a couple of percent different from the underlying value, and that's not great. That's not what people expected. So, really shoring up a lot of these operational pieces, getting out there, continuing to tell the story, continuing to show that we are bullish on the space.

It's like top of the first inning in digital credit, and we think there's a long, long way to go. We are very bullish on this narrative. We're very excited. I think all of these things will help to build confidence, but ultimately, I think confidence is in large part a function of price and time.

The longer we're just around, we haven't broken, we haven't had a hack, we haven't just stopped posting, stopped doing interviews, and gone away—each month we do the attestations with Wolf, each month that we keep shipping new things—that builds confidence. That builds trust.

And then, on the other side, price. As STRC returns to par, as Bitcoin starts to go up, as interest starts to come back into the space, I think that also will build confidence. So, it's a function of time and price. There are lots of things that we can do along the way, mostly on the time front, to really help build that confidence and trust.

And price will, I think, improve in its own time—next week, next month, next quarter, next year. You never know. We'll be here continuing to build, just like any project continuing to build through a bear market. This isn't our first, second, or third bear market.

9. Thoughts on future maturities for Strategy’s convertible debt

And then, Parker, just jumping back into Strategy here, I saw a segment that you did with Laura Shin. It was a really great little segment where she walked through the convertible debt schedule. There are some potential headwinds looming kind of far out, starting, I think, somewhere in September 2027 and going into 2028. There are these large maturities that Strategy is going to have to deal with, and obviously all of this floats down from Strategy to the preferreds to the tokenized versions on-chain.

I thought your answer was great, but I wonder if your answer has evolved at all, or if there are any other ways that you think the Strategy team can deal with this. How are you thinking about it?

Sure. So, there are a bunch of angles here, and I think a lot of this comes down to the fact that most of the negative sentiment I've seen around this is from people who don't understand traditional markets, don't understand fixed-income markets, and don't understand converts. That's why converts are this niche product in general. A lot of people in TradFi don't understand them.

There are a bunch of things involved here, and to get a full picture, you need to understand both the TradFi side and the crypto side. There are just not a lot of folks who have that background—folks who have both. Strategy certainly does, though.

A couple of things that they can do: The first is just wait. Most of the put dates are in mid-2028. Bitcoin historically is quite a bit higher at that point in the cycle, so, roughly 2 years from now, you would expect Bitcoin to be higher and those converts to be trading above par. That's all they need. They need to be trading above par for investors not to exercise the put and to push out to the maturity date.

But Strategy is not just going to wait and hope Bitcoin goes up. That's not what they're going to do, but I would imagine that's one option. The other option is to refinance.

These convertible investors have made a lot of money off the converts, even with the common stock going down significantly, and that's because of how these converts are run. The vast majority of convert investors do what's called convertible arbitrage. They'll buy the bond, and this is why they're willing to buy a bond at a zero coupon. Why would anybody buy a bond and not get paid anything? It's because of this convertible arbitrage.

They'll buy the bond, and let's say the bond gives them 1 million shares. When they convert the bond into shares, they get 1 million shares for whatever price they bought the bond at. They immediately go out and short 1 million shares, or maybe they play it out with the delta—they'll short 900,000 shares.

When the price of MSTR goes down, they're making money on that short. That should more than compensate for any losses on the bond. They actually make money both ways here. They're constantly adjusting their delta, but it's a delta-neutral strategy.

Jane Street is one of the largest convertible-arbitrage funds. There are a number of other big ones, though. These guys are agnostic to the price of the stock. It's helpful for them generally if it goes up, maybe a little bit, but they make money in both directions. It's effectively a gamma play. It's basically a derivative of delta as a Greek.

What MSTR, or what Strategy, is doing is selling off the volatility in their stock. MSTR is still very volatile. Volatility like that would be the problem for the situation for the refinancing situation. If the volatility on MSTR is compressed to nothing—if MSTR just started trading at $100 and never moved—then their ability to do new converts would come way down. Obviously, that's not happening, but volatility is much greater than it was when they issued.

There is a scenario where, let's say, MSTR is trading at $50 or something, and Bitcoin is way down. September 2027 rolls around, the investors want to put the bonds, and Strategy says, “Okay, well, we don't want to raise new capital. We don't want to sell Bitcoin. We don't want to sell common equity to pay this back. We want to just refinance.”

They would go to these investors with a new bond and say, “Hey, look, maybe the strike price is at $300 on MSTR. We're going to bring this down to $100 on MSTR, or $80 or something—the strike price for the conversion from the bond into common stock.” Then they would just reissue.

This might dilute the common stockholders on a pro forma or fully converted basis, but it would not be a direct dilution. They would basically refinance. They wouldn't need to come up with any cash; they'd get a new bond out there. I have very high confidence that unless Bitcoin was at, like, $5,000, everyone said Bitcoin was dead, and Strategy became a bankruptcy candidate, they would be able to refinance with essentially all of the convertible holders.

That's another option at their disposal. It's probably the least good option because they're going to have to lower the strike, and that's going to dilute the common stock on a fully converted basis. But that's the worst-case scenario. The other option is just to buy back the converts early. That's what they did with the $1.3 billion in cash that they spent from the reserve: they used it to buy back converts. Their stated goal is to buy back all of the converts, and they can do this over time.

Back to your cash question—or your earlier thought about increasing their reserve—I think the reason they spent the reserve down was because they understand, more than anyone else, their own ability to raise capital. What was it? 2 weeks ago, when there was maximum panic, they raised $1 billion off the common ATM. This was when the stock was tanking, Bitcoin was tanking, everyone was bearish on Strategy, and shorts were piling in, while they were piling in as well. The stock still traded above 1×.

I guess on Friday, it traded down right to 1×. They raised $1 billion in 1 week. Their ability to raise capital is something people don't fully appreciate. Extrapolate that out: they need to do 7 more weeks like that, and they have $7 billion in cash and could retire all the converts. They could do 1 week a quarter for the next 7 quarters and have the cash.

I think that's why they felt comfortable spending down their cash, but the market clearly doesn't understand their ability to raise capital, so it got spooked and said, "Okay, okay, we'll raise cash again." They could certainly run the common ATM, since common is now trading at a premium to NAV. The last option is that they could sell some Bitcoin. They sold, what, $200 million or something last week? Bitcoin was up, so people were like, "As soon as they start dumping Bitcoin, the death spiral begins." No. They can sell Bitcoin, and Bitcoin actually just goes up.

Some other points I like to make there: a couple of weeks ago, there was a headline that, I think, said $2.something billion—or maybe $1.7 billion—of IBIT traded in a single dark-pool transaction. Clearly, I reached out to an OTC desk. We work with a lot of OTC desks. I just called them up: "Hey, I want to sell $2 billion worth of Bitcoin right now. What's your quote?" They quoted me—I can't remember the exact number—it was like 2.5% off spot or something, or 2% off spot. I thought, "All right, that's like daily deviation." It was a live quote, an executable quote. We would just deposit the Bitcoin to the OTC desk, and they'd wire $2 billion over. Poof, done.

I think people just do not appreciate at all the ability for the Bitcoin market to handle the type of flows that MicroStrategy could tap into to raise capital and address the converts. They've got so many options at their disposal. I think this is entirely an investor-confidence situation, maybe brought on by some shorts piling in, thinking they can make some money here and breaking a product. Strategy can solve this problem in 6 different ways. It's just not an issue at all. It's a challenge to investor confidence, and that's always the biggest problem. How do you convince the hive mind not to freak out? That's what they're up against here.

Yeah, that was all really well broken down, and that last piece about human behavior and market confidence was important. You saw Saylor start to issue almost like forward guidance, right? He's almost having to talk to the market ahead of time and telegraph some of these moves, with the 32 Bitcoin thing or whatever. He's like, "We might sell some."

There's just a ton of Saylor Derangement Syndrome. He's always been a lightning rod for polarization. People seem to love him or hate him. But again, I've brought this up many times on podcasts: since Saylor has been in the market, there's been a huge cohort of people just calling for his head. "He's going to blow up. He's going to get liquidated." Always. But at every turn, he's managed to turn on some sort of new financial engineering. Give this guy a computer with an internet connection, and he's going to find more ways out of this convertible overhang. Obviously, that's kind of a joke.

Just on the Saylor point, I think the most underappreciated thing about him is that he is a fantastic salesman. Sometimes to a fault—maybe he oversells products, right? But when we were raising for DFDV, the Solana company, and we were out in the market talking to investors, the thing we heard over and over again from big hedge funds, institutional investor long-only guys, and mutual fund guys is that they would say, "I understand Bitcoin is digital gold because of Saylor."

Then they were like, "Explain this Solana thing to me." Saylor has done more to educate the global financial system on Bitcoin than any other single human being in history. I don't think that's going to stop all of a sudden. I think he likes it; I think he's energized by it, and there's still a lot of education that needs to be done.

He's not the CEO of Bitcoin, of course. Bitcoin is a decentralized system. But he is, right now, the chief marketing officer of Bitcoin. If you want to set all the products aside and just bet on the people, that's the type of bet you want to make. Maybe that's not an STRC bet; maybe it's a common-stock bet—MSTR or whatever. He is fundamentally a fantastic educator and salesman selling to the people who wear the suits and manage the money.

I'm sure the people on CT can get upset at him, hate him, whatever. But the people on Wall Street, the people in Hong Kong and Singapore, in Abu Dhabi and Dubai, and in London and Tokyo, really appreciate him and what he's done educating them on Bitcoin.

10. Why DeFi composability makes STRC more powerful

Parker, we're getting close to closing here. I want to go back to this idea of STRC and Apex. You can buy STRC in your brokerage account, and you talked about how we're so early with digital credit. Maybe frame up why you think digital credit on-chain is still really nascent and interesting. What is exciting on the Apex side for digital credit on-chain?

11. Has the original vision for STRC changed?

Yeah, I think this really comes into the broader RWA question: what makes broader RWAs exciting on-chain? The analogy I would use is with STRC. We've got a Lego block—a red, 4-tile, 4-knob Lego block. On its own, it's not very interesting. You put it in the brokerage account, and you could margin-borrow against it, maybe. Some of them don't offer margin, but there's not a lot you can do with it. Once you get into DeFi, that's where the full DeFi composability comes in. You can add in all the other Lego blocks and build some really interesting things.

Some examples would obviously be on the Pendle side: interest-rate stripping, basically converting the floating rate into a fixed rate, and the points farming along with that. You've got the tranching with the tranching protocols like RyzeCo, where you've got a senior tranche and a junior tranche. Pretty interesting there. The seniors were completely protected through this event, so that's interesting.

You can use it as a payment rail, so you can pay for things with it. Derivatives, all sorts of things that you can do, and many more things that are going to be developed that you can do with the asset once it's in DeFi. I think this is really the same pitch for basically every real-world instrument to get on-chain.

But I think you're finally reaching an inflection point around liquidity, infrastructure, credibility, knowledge, understanding, and maybe a little bit of regulatory work to make RWAs finally work on-chain. Once they do, it's just a far better setup. Anyone, anywhere in the world can access these primarily U.S. financial products and trade them 24/7, 365, in a huge plethora of different manners and venues. It really unlocks finance, effectively.

Stretch, obviously, and Apex, by extension, benefit from all of that being on-chain. I think you're just going to see a giant wave of RWAs coming on-chain, and we're really focused on yield-bearing RWAs, bringing them on-chain because of that composability and accessibility—people anywhere in the world getting access.

I should add, for disclaimer purposes, that Apex is not available on a primary basis in certain regions. But excluding those regions, it has wide accessibility.

Yeah, there are a lot of different DeFi yield opportunities there that are tied into Apex, many of which we've covered in the Edge newsletter. We also just did a podcast with Jay Bhavnani, the founder of Royco, so we talked in detail about the apyUSD market. If you're interested in better understanding a really powerful example of what happens when you tokenize a real-world asset like Stretch, this is a great example.

Again, apyUSD isn't exactly tokenized Stretch, but Stretch is one of the assets backing it. So you're getting some exposure there to Stretch. When you bring that on-chain, you get all of the DeFi composability. You get these really interesting use cases like tranching or, in the case of Pendle, earning a fixed rate versus someone else who wants to bet on the actual yield.

12. Closing

Anyways, there's lots and lots to dig into there, and we're hopeful that this is just an early example of what's possible in terms of bringing that exposure to real-world assets on-chain. Parker, I think this is a great place for us to start to wrap up. Thank you so much for coming on with us. It's been really interesting to dig into all the details around Strata and Apex. I appreciate you talking through some pretty tough questions there, and I want to give you the final word here before we go.

Yeah, I think the last thing I'd say is that we are in an incredibly innovative time where change is accelerating. AI is really helping with this, but we're building or rebuilding the financial system. We're doing that on both sides of the fence, on the DeFi side and on the TradFi side. When you're building something new, you should expect there to be some mishaps along the way, some unexpected happenings, some waning incentives—these types of things.

Building something entirely new does take some time. I think crypto is better at speed-running things than any other industry. But I wouldn't count out or ignore digital credit, RWAs on-chain, DeFi in general, or crypto in general just because it has a bad month, a bad quarter, or even a bad year. We've been here before, and we'll probably be here again, broadly speaking, on the crypto level. But we're constantly moving forward: two steps forward, one step back, up and to the right.

The prize here with digital credit on the TradFi side is the trillions and trillions, tens of trillions, of dollars locked in credit markets. That's the goal. That's what we're after. Bitcoin should be underpinning that market instead of it effectively being faith in U.S. government Treasury bonds. This is going to take a little bit of time. It's not going to happen overnight, but this is where we're going collectively as a community.

Bringing all these RWAs on-chain is also where we're going as a community. This is going to take some time. If you're a builder in the space—or even if you're not a builder—just download Claude Code and start being a builder. There are so many new things you can do on-chain with these things. The tranche protocols are a great example, but there are going to be all these other primitives that are developed. Now is the time to jump in and build these things.

It's a bear market. It's a time when the tide's gone out and attention is waning, so jump in. If you've ever wanted to build something, grab Claude Code, grab Cursor, start writing, and start building. There are so many cool things to get involved with here. I think the future is really, really bright over the next year or two and into the next bull market for RWAs, digital credit, and everything happening on-chain.