Strategy Falling Below $100 Is Either the Easiest Free Money Ever Or a Serious Problem

**Kyle Reidhead** (0:00)
Galaxy is the one thing that I'm still very excited about. I think it's still undervalued. I think it's sitting at about 13 billion market cap right now, and from a lot of different estimates, it should probably be 20 billion or more. I think Galaxy is gonna absolutely shoot through the roof.

**John Gillen** (0:13)
Coinbase just announced a big system update. Robinhood laid off some staff. Crypto seems to be finding a floor, but STRC is still off of its peg. Is Crypto about to be so back, or is it all about to be over? Once again, hello and welcome to The Milk Road Show, the podcast that knows that the Federal Reserve has a new chairman but the same old money printer. I'm your host, John Gill, and today is Thursday, June 18th, and today we are back with another rousing episode of the Milk Road Pro Analyst Crypto Research Meeting. Once a week, we huddle up to talk about what's up in crypto. I always learn a lot from these meetings. I know our audience loves them too, so if that sounds good to you, make sure you like and subscribe. Share this episode with somebody who's gonna enjoy it. Today's episode is brought to you by BitGet, stocks 2 with real liquidity and dividends. Nexo, earn interest, borrow and trade crypto, and Kalshi, where your takes finally pay out. I think we're gonna have a lot of interesting takes today. Welcome back to the show. Martin, Kyle, gentlemen, what's on your mind today about crypto?
Did you guys watch the FOMC meeting?

**Kyle Reidhead** (1:13)
I did not. I saw some highlights. That was it though.

**John Gillen** (1:15)
Okay.

**Kyle Reidhead** (1:16)
All right.

**John Gillen** (1:17)
Martin, were you paying attention to what's up at the Fed this week?

**m0xt** (1:19)
No. I just read your thoughts about that.

**John Gillen** (1:23)
Well, that's good to know. I wrote a whole newsletter summarizing it. There were a lot of takeaways. Not a lot related to crypto though. A big thing I think a lot of people are wondering about on crypto here right now, at least as far as strategy is concerned, is this STRC product. This brought in billions of dollars of capital to crypto. A lot of new buyers, great product market fit, but now it is off its $100 peg and it is struggling to recover. I've heard a lot of mixed opinions on this. Some people are afraid that this is going to be like a Luna 2.0. Some people are saying it's no big deal and say they will get the peg back eventually one way or another.
Is this concerning to either one of you guys? Kyle, let's start with you. What do you think is the picture here?

**Kyle Reidhead** (2:00)
So I think the first thing that everyone's getting wrong on Twitter is they keep saying it's de-pegged. And I think the thing to understand is this is not a stable coin. It doesn't have a peg. It's not supposed to be at $100.
The way that this is, it's just a stock, right? It's a preferred stock. So it's meant to move up and down and it's not a stable coin. It's meant to remain at a specific price. So it doesn't really matter if it's below $100 or above $100. It's still okay.
And so if it goes above $100, that's preferred, of course, because then they can sell it and they can buy some Bitcoin with it. But if it's below, it's not actually an issue. It's not like a stable coin where everything breaks, right? And it just like all of a sudden goes down to zero.
It doesn't need to be at 100 So I don't think it's as big of a concern as people think. It's definitely not a Terra Luna type thing where it was meant to be pegged. Obviously, it would be better if it was at $100 or even above so that they can sell it and buy more Bitcoin with it. But again, it's not that big of an issue. Obviously, there were people that bought it at $100 and now they're down 10% on something they thought was going to be a little less volatile. But either way, even if you buy it at $90 or 89, which it is now, you still get your dividend the same amount if it was $100, right? So you're still getting paid out.
Right now, if you buy it, you would get the same dividend plus the potential for it to go up 11% to go back to $100. So maybe there's people that are interested in that. I think the issue right now is one, obviously there's just concerns because they sold Bitcoin, was it two weeks ago now, they sold 32 Bitcoin. And then there's like competing products, was it Strive? It's come out and they have daily dividends instead of dividends two times per month. So, and I think they're maybe 12 and a half percent. So, Yield or APY, so I think maybe people are liking that right now. So, I don't know, I'm not overly concerned. Obviously, it is not a great thing for it to be down here, but ultimately they've got 860,000 Bitcoin or whatever. So, they have, I think they posted yesterday 32 years worth of capital to cover the cost of this dividend. So, I think ultimately it's going to be fine. It definitely doesn't look great and probably it's scaring Bitcoin right now, which is maybe why Bitcoin is sitting at 164,000. But if I was a betting man, which I am a betting man, but I'm not actually betting on this, but if I were to bet, I would say this is probably going to go back to $100 at some point in the next, I don't know, a few weeks.