Transcription
Good morning everybody. My name is Adam Livingston and I am the Bitcoin Wizard. Today I'm going to be talking about my amazing new Bitcoin-backed income strategy that will pay me a bi-weekly paycheck. And I believe that we are on the precipice of incredible growth using this strategy.
But this is not financial advice at all. This is financial entertainment. So if you can't handle your own emotions and you need to project your emotions on me for your own decisions, I suggest that you leave this video right now.
We are going to be combining the newest fixed income instrument from Strive which is named SATA and Stretch from Strategy in one cohesive strategy. I want to engineer a very stable income stream with higher efficiency than holding either instrument alone. The strategy is pretty simple. We are going to stabilize my income with stretch and then I'm going to amplify it with SATA and I'm going to tell you exactly how we're going to do that and the mechanics. I'm going to explain it all.
This is not some moonshot either. This is going to be a very clean, practical strategy for investors who want very consistent bi-weekly income without sacrificing total return at all and in fact getting a killer total return on top of the yield. Stretch is going to provide the floor and SATA is going to provide the lift and this combination is going to provide the efficiency.
But before I talk about the strategy, I really want to thank Horizon for sponsoring this video. In fact, I think I'll probably use Horizon to get my home equity that's trapped in my house. I have about $100,000 in home equity right now. I should just use Horizon to get that hundred grand and then just do this. And you'll see why.
But Horizon helps you get your trapped home equity to buy Bitcoin and there's no debt, there's no monthly payments, and there's no term limits. You don't have to use the money to buy Bitcoin necessarily, even though that's what most people should do since Bitcoin is the Apex asset. Check out Horizon in the link below, and I will talk more about them at the end of the video.
So, talking about Strive's new SATA, this instrument begins trading shares on November 10th, Monday. I believe that's accurate. Somebody can double check me, but we just had the IPO the price at $80. 80 bucks, but it is designed to eventually trade at a $95 to a $105 band. Much like Stretch from Strategy is designed to be pegged from $99 to $101. This has a bit of a bigger band from that $95 to $105. and they're doing it through kind of the same dividend adjustment mechanism that raises or lowers the rate to maintain that target band.
So, a couple things though, they have already locked up a year's worth of cash to pay the dividend. So, to me, on a risk-adjusted basis, I know I'm going to be getting the bare minimum yield off the first year alone because of the cash that they're setting aside, let alone whatever happens to Bitcoin. And they are going to raise the dividend until it starts to trade at that $95 to $105 range.
Now, the stated amount is $100 per share. That number matters because all dividends are calculated on this base and not the market price. So, if you buy the preferred at the discount IPO price of $80, you are still getting paid as if you bought it at par, which is one of the main sources of efficiency here. So, 12% paid monthly. That means each share pays $12 per year. Nothing exotic. No hidden formulas here. just a clean high cash yield that resets if the price moves outside of its intended $95 to $105 range eventually once it gets there.
So, fun fact for you, if you do the math, if you get in at the $80 price, that means that you're getting a 15% yield on day one before any adjustments or price movement. So, if it trades up toward $100, which is the design goal, investors get to capture both that amazing yield and a 25% gain on their invested capital.
So, SATA is engineered for high yield, predictable monthly income and a very clear price target. In my opinion, this is the rare preferred stock that rewards the early buyers without requiring them to gamble on speculative behavior.
So, the structure is going to be doing the heavy lifting. SATA includes various protective mechanisms that exist for one purpose. They make it extremely difficult for Strive to treat this preferred like an optional suggestion. The rules are going to ensure that the dividend stays alive, the price stays very stable, and the holder is not left hoping that management suddenly discovers fiscal responsibility.
The first mechanism is the dividend ratchet that we just talked about. They can raise the dividend to increase the demand. And they cannot reduce the rate unless specific conditions are met, which prevents them from quietly turning off the income stream. This protects the yield and reinforces the price target.
The second mechanism is the compounded penalty. If Strive ever misses a dividend, the unpaid amount compounds monthly at a punitive rate that can escalate toward 20% maximum, which is a very polite way of saying that missing a dividend really starts to become financially painful for the issuer, i.e. Strive. It creates a very strong incentive for Strive to prioritize these payments even if the other parts of the business are having a bad month.
The redemption at premium is yet another protective feature as well. After the shares are publicly listed, Strive can redeem them at $110 per share or higher plus any accrued dividends, which would cap the downside for all of the investors and provide a controlled exit point at a premium. So, it is the rare scenario where the company buying your shares back would actually work in your favor instead of reminding you of a corporate mistake.
And then there is a fundamental change protection. So if some major structural change occurs at the company, holders have the right to force Strive to repurchase their shares at the $100 stated amount plus accrued dividends. So essentially this ensures that the investors aren't trapped in some reorganized or repurposed entity that no longer resembles what they originally invested in.
So taken together, these mechanisms make SATA pretty resilient in my humble opinion. So, the structure gives the investors predictable income, very strong downside control, and very clear remedies if anything goes off script. Very rare to see protective features this strong and a high yield preferred, especially on one that's being used to just buy more Bitcoin.
Now, this is the exciting part because I believe that SATA has an exceptional return profile. And I'm talking, yes, a 40% total first year return. And no, I'm not exaggerating in the slightest.
So, the first component is obviously the dividend yield on cost. Remember, if you buy it $80 and you get a 12% annual dividend, that means that you get a 15% dividend yield on cost because SATA pays the $12 per year on a $100 stated amount. But the IPO price is around 80 bucks. So, the early buyers are going to receive that 15% yield immediately. There's nothing theoretical about this. This is cash flow based on simple arithmetic.
And then the second component is the capital appreciation because remember it is designed to trade in the $95 to $105 range. So moving from 80 to 100 produces a 25% gain. And this is not based on speculation necessarily. It is a structural design goal supported by the dividend adjustment mechanism. And stretch is the precedent. Stretch IPOed at $90. Now it's trading at 100. So there you go.
So, when you combine the dividend yield with the expected price move, you arrive at an approximate 40% first-year return, and that is the baseline scenario, assuming there's no dividend adjustments beyond the initial 12%. If Strive increases the dividend rate to maintain that target trading band, the yield on cost rises into the 18 to 22% range. Yes, I'm not joking. In that case, the total return moves from 43 to 47% in year 1. At that point, you are earning the kind of returns that usually require stomach churning volatility. Except here, the volatility is intentionally suppressed by design. It feels almost suspicious to get returns like this without having to watch your portfolio behave like a cardiogram. And that's why SATA is standing out to me right now. The structure is giving investors high income, clear price support, and an early stage discount that is going to magnify your total return. And the mechanics are just going to be doing all of the work.
This is my base case. You're locking in your 12% yield. You're getting the 15% yield on the $80. SATA raises the dividend until it meets that band. And then you're getting a 25% capital gain, which gets you a 40% total return. And obviously assuming that they do need to juice the dividend a little bit to get the price up to the $95 to $105 range. Well, you can see a 44% even maybe close to a 47% gain depending on how much they need to juice the dividend by.
So to sum it up, this play is outrageously attractive in my humble not financial advice opinion because you're getting equity-like total returns in year one. You're getting a bond-like stability in the price. You're getting a $100 mechanical magnet and massive asymmetry. So, if it hits the peg, you collect 40% in a year with almost no volatility.
And this is the cool part. If I want a Bitcoin-backed income stream that is incredibly powerful and very high yielding, I will also buy Stretch from Strategy because Stretch is the stability anchor. It trades between a $99 and $101 band. But if you're buying into Stretch right now, it doesn't carry that large initial price discount. Right now, the effective yield is 10.25%. That is what it took for them. They raised it from 9% to 10.25 to trade at par.
So, Stretch's job is very simple. It provides very consistent income with as little drama as possible, which is a very refreshing change from most yield products in today's market. So, if the dividend rate typically settles between the 9 to 11% range, let's say after all the ratcheting, the key feature is that tight price peg and the payments occur at the end of each month. That creates a very reliable cash flow schedule. You know exactly when the income shows up and you do not have to babysit your position to figure out what's happening. It's that simple. You give Michael Sailor your money. You buy Stretch. He buys Bitcoin. You get your 10.25% end of month. And no, you don't get 10% a month. That's 10.25% annually paid monthly.
So in practical terms, Stretch is the foundation layer in my income stack. Okay? It will not deliver explosive returns, but it will not ruin your sleep either. I think everybody, if they could go back in time, they would have bought it at $90. But now that you're buying it at par, I think that you're getting a stable, modest yield instrument with minimal volatility and it pairs with SATA because they have a more aggressive return structure based on the capital appreciation.
So, as it stands right now, this is what it looks like in my humble opinion. You're getting the yield range of SATA being a bit higher. You're getting the price appreciation in SATA and you're getting a total return potential from SATA pretty much based on the mechanics of Stretch.
So, when we're talking about the practical benefits of this strategy, I'm no longer getting a monthly paycheck. I'm getting a bi-weekly paycheck, which actually kind of sounds like a regular paycheck. This strategy is my bi-weekly income ladder because holding both instruments produces two predictable monthly cash flows. One paid out on day 15 mid-month, the other one at the end of the month. SATA gives you your first cash flow right in the middle of the month. It's predictable. It is high yield and it's going to arrive at a point where most people are wondering where their last paycheck went. Stretch will pay at the end of the month and that delivers your second cash flow, closing out the month with another consistent payment. This combination gives you two clean recurring income events every single month without requiring you to hold a dozen different instruments or become an expert in dividend calendars.
So boom, this structure gives you that incredible yield on SATA, the predictable yield from Stretch and then it gives you increased flexibility. It turns the two preferred instruments into a stable, predictable cash engine. It's not too complicated. 50% in Stretch, 50% in SATA. I get the stability of Stretch. I get the enhanced yield of SATA. And then I let them balance each other without turning portfolio management into a full-time job. With Stretch, I'm getting that baseline yield, which is still really high, $10.25% as of now. And then on the SATA side, I get the higher yield and the opportunity for capital appreciation as it moves from $80 toward the $100 price band.
So, in my humble opinion, when you split the capital even between them, you get several clean outcomes. First, the blended yield rises to roughly 12 to 16% depending on how aggressively SATA has to ratchet its dividend. Also got to remember if the dividends are classified as return of capital, your tax-adjusted dividend yield is much higher than 12 to 16%. So your blended expected rate of return between the two instruments here is 25 to 29% with bi-weekly cash flow. This says bimonthly, but remember it's bi-weekly. Whoops. The volatility would be lower than holding SATA alone and the returns are higher than holding Stretch alone. So I think this is a fun little happy medium strategy.
So to sum it up, my combined Stretch and SATA allocation is a bit of a sophisticated yield strategy. Not really. It's pretty simple. 50% 50% but it leverages the structural advantages of Bitcoin Treasury preferred instruments. Bitcoin-backed credit is the future. You can feel it now. Look at these juicy returns. You can't tell me this isn't the future. Everybody wants this. You're telling me that I get a bi-weekly paycheck, a high blended yield, and I get to limit my downside through various strong protective mechanisms and getting significant capital efficiency on top of all of this. I think this structure is very attractive for investors who want high monthly income, structured timing, and exposure to instruments backed directly by Bitcoin accumulation without turning investing into some emotional endurance test. These outcomes make the strategy clean, predictable, and unusually effective for generating income in this sector.
I hope you like the idea of this strategy. My name is Adam Livingston. I am the Bitcoin Wizard. If you like this content, please like the video, subscribe to the channel so we can continue to spread the orange gospel to the masses. Have a terrific day. Do not party too hard. Class dismissed.
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