News Block: Bitcoin Wins the War Trade, Private Credit Collapses, Strategy's STRC Just Became the Most Liquid Preferred Stock on the Market

**Natalie Brunell** (0:01)
Welcome to the Coin Stories News Block powered exclusively by Ledn. I'm Natalie Brunell, and in about 10 minutes or less, I'll provide you with insightful updates on Bitcoin, financial markets, and the global economy. Everything you need to know in one block. Let's go.
When war broke out between the US, Israel, and Iran on February 28th, the critics wasted no time. Bitcoin dipped, and suddenly everyone had takes. See, it's not a store of value, it's just a risk asset. We heard all the usual things people say whenever Bitcoin goes through a correction. So now, two weeks into the war, I have a question for those same critics. Which asset has been holding up the best? If you said gold or silver, you'd be wrong. If you said the S&P 500, nope. Bonds, wrong again. The answer is actually Bitcoin. And that's where we're starting today. When the US and Israel began striking military targets across Iran, it was on a Saturday. Most markets were closed, but not Bitcoin. It's the only major liquid market that trades 24-7, 365 And within hours of the war outbreak, Bitcoin shed roughly $50 billion in market value as investors sold. But as the dust started to settle, Bitcoin began climbing again, and it hasn't stopped. It's now up more than 7% since the strikes began, while every other major asset class is down. And this isn't a one-time thing. River published a chart that tells the bigger story here. They tracked Bitcoin's 60-day performance after every major geopolitical event since 2020, from the Russia-Ukraine invasion to the US banking crisis to the yen carry trade unwind. And Bitcoin delivered positive returns in every single instance. On average, about 18% over 60 days compared to roughly 3% for the S&P 500 and 4% for gold. As River put it, quote, Bitcoin is safety when it matters most. Because Bitcoin trades around the clock, it's typically the first asset to sell off when crisis hits. But once the initial panic subsides, investors recognize that what just happened is actually bullish for a decentralized, censorship-resistant, permissionless monetary network. In war and crisis, inflationary pressures also rise, debasement risk increases, governments can impose capital controls, and suddenly the case for an asset that no government can freeze, seize or print more of becomes much more clear. But even with all of this, some investors still have their doubts. Stanley Druckenmiller, one of the greatest investors of all time, just did an interview where he called Bitcoin, quote, a solution looking for a problem. He said it wasn't needed as a store of value. Look, I have enormous respect for Druckenmiller, but even the greatest investors are allowed to be wrong every once in a while. When I look at Bitcoin, I don't see a solution looking for a problem. I see a technology that solves very real problems facing billions of people right now. People who can't save because their governments keep debasing the currency to fund deficits and wars. And when those people try to flee, capital controls prevent them from escaping. That's not theoretical. It's happening right now in dozens of countries. And that's why the last two weeks matter so much. What we witnessed wasn't just Bitcoin outperforming gold and the S&P during a geopolitical crisis. It was Bitcoin proving in real time under real uncertainty that it is emerging slowly as a legitimate safe haven asset and store of value. Not because someone declared it one, but because when the world is thrown into chaos, Bitcoin can hold up better than everything else. It's not a narrative. It's the data. So if Bitcoin continues to pass these stress tests while every other asset stumbles, investors like Druckenmiller will have no choice but to revisit their prior beliefs. It wouldn't be the first time Druck changed his mind on something. That's one of the defining traits of great investors. And in the same interview, he admits he does it all the time. So if the evidence keeps mounting the way it is, I think it's only a matter of time before he does. Because the story is becoming pretty simple. When chaos strikes, Bitcoin outperforms over the long run. That's not a solution looking for a problem. That is a store of value proving itself in real time.
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Speaking of Bitcoin being the best performing asset of the last couple of weeks, let's talk about who's been buying it. Strategy just had one of the most aggressive weeks of Bitcoin accumulation in the company's history. Last week, Strategy acquired nearly 18,000 Bitcoin for approximately $1.3 billion. It's quickly closing in on 750,000 Bitcoin. The company raised the money through a combination of MSTR Equity and Stretch, STRC, Strategy's Variable Rate Perpetual Preferred Equity. So here's a quick recap on Stretch. It currently pays an 11.5% annualized dividend monthly in cash. It's designed to trade near $100 par value, and it offers what most credit instruments promise but rarely deliver, high income, daily liquidity, and price stability. Every time Stretch trades above $100, Strategy can issue more of it to buy Bitcoin and bring Stretch's price back toward 100 So the stronger the demand, the more Bitcoin Strategy can accumulate. These past few weeks, Stretch has reached what I can only describe as escape velocity. Strategy CEO Phong Le posted that in the last 10 trading days, Stretch closed at or above $100 while trading volume increased more than five times over. On March 12th alone, it hit a record $740 million in daily volume, making Stretch the most liquid preferred stock in the entire market by far. Some of that volume has come from corporations like Avalanche Digital, Prevalon Energy, OranjeBTC and Strive, all of which have recently announced Stretch allocations as part of their treasury strategies. So what does all that volume translate to? Bitcoin buying and a lot of it. Horizons, Joe Consorti put it in perspective last week writing, Strategy has purchased an estimated 10,098 Bitcoin so far this week through Stretch proceeds alone. For context, only about 3,150 Bitcoin are mined every week. Let that sink in. Strategy is buying multiple times the entire weekly mining supply through a single digital credit instrument. That's a structural bid on Bitcoin, the likes of which this market has never seen. Here's why this is so powerful. Stretch creates a flywheel that feeds on itself. Sam Callahan put this brilliantly in a recent interview. It goes something like this. People buy Stretch for the yield and price stability. Strategy takes the money they raise through Stretch and buys Bitcoin. This helps Bitcoin's price at the margin and more Bitcoin strengthens Strategy's balance sheet. A stronger balance sheet makes investors more confident that Stretch's yield is durable and well supported, which makes Stretch more attractive. And that brings in more demand for Stretch, which leads to Strategy raising more capital to buy more Bitcoin. Round and around it goes. Every turn of that flywheel makes the whole thing stronger. If you run the math forward about how much Bitcoin Strategy can potentially acquire through Stretch, the numbers are pretty staggering. CoinDesk recently estimated that at the current pace Stretch is scaling, there's a scenario where Strategy could hit 1 million Bitcoin by August. And here's where it gets really interesting. While Stretch is seeing record demand, the $1.8 trillion private credit industry that Wall Street spent the last decade building appears to be unraveling. This week, Morgan Stanley and Cliffwater both capped withdrawals at their private credit funds because investors wanted out and the funds couldn't return the money fast enough. JPMorgan started pulling back too, marking down loan values and restricting how much these funds can borrow. So basically, investors are lining up to withdraw their money and the funds can't pay them fast enough. As a result, the stocks of private credit giants like Blue Owl, KKR and Blackstone are all down more than 30% this year. Since September, over $260 billion in market cap has been erased across the sector. The question everyone is asking, what are these portfolios actually worth? And it's a fair question that doesn't come with a straightforward answer because of how opaque these funds are. Now compare that to Stretch. Private credit offers a yield of maybe 8 to 9%, but that yield comes with illiquidity, opacity, questionable loan quality, and right now the inability to even get your money out. Stretch, on the other hand, offers a higher yield with no gates, no lockups and no hidden loan books. It's backed by Bitcoin, which has no counterparty risk, a fixed supply of $21 million and full on-chain transparency. As Michael Saylor put it, digital credit is just better than private credit. And given the recent demand for Stretch, the market seems to agree. The bottom line is digital credit products like SDRC aren't just competing with private credit. They're offering a fundamentally different product in every way that matters. Saylor already posted Sunday night, hinting at another Bitcoin purchase announcement coming Monday. And if estimates are even close to correct, this buy could be even more than last week's. The digital credit flywheel is spinning and it looks like it's only going to get faster from here. That's it for the News Block, your weekly Bitcoin and economic news update powered exclusively by Ledn. I'm Natalie Brunell. Make sure you're subscribed to Coin Stories so you never miss an episode. This show is for educational purposes and should not be construed as investment advice. Until next time, keep stacking.