Log Scale Investments CEO Mike Flaum believes Bitcoin (BTC) will hit a new all-time high in 2027, arguing that it no longer adheres to the four-year price cycle.
Flaum made the comments during a detailed interview with Bitcoin Magazine, discussing BTCโs price cycle and corporate treasury companies.
Bitcoin (BTC) To Hit New ATH
Flaumโs prediction, shared by Bitcoin Magazine after its October 30 interview, predicts BTC will surge to a new all-time high next year. The bullish prediction comes even as markets interpret BTCโs recovery from recent lows. Flaum also argued that BTC no longer follows its four-year cycle, as institutional capital and ETF flows influence price action. The interview also featured extensive discussions about Strategy, Strive, and the capital structure used by Bitcoin treasury companies.
Bitcoin halvings are generally viewed as a reliable gauge to measure market tops and bottoms. Investors can use the four-year cycle to compare the current market with previous cycles. However, Flaum believes institutional demand has changed market dynamics. Spot Bitcoin ETFs have brought forward demand that arrived towards the end of the cycle, while Bitcoin treasury companies have reduced the available supply of the asset, pushing prices higher.
Strategyโs STRC Back At $100 Par Value
Flaum discussed Strategyโs STRC preferred stock during the interview, and what its return to its $100 par value means for the company. According to Flaum, with STRC returning to its $100 par value, Strategy can resume issuing the preferred stock at par without increasing its cost of capital and use the proceeds to fund more BTC acquisitions. The Log Scale Investments CEO also believes STRC has become more resilient after Strategyโs stock buybacks. He also highlighted that STRC has held up relatively well despite a broader market downturn. With the preferred stock at par value, Strategy can raise capital more effectively to fund future purchases.
Flaum also discussed Strategy securing shareholder approval to move dividend payments on four of its preferred stocks to a daily schedule, arguing that it makes them more attractive to both retail and institutional investors. It allows investors to receive dividends daily instead of waiting for fortnightly or quarterly payments, and to monitor whether Strategy is meeting dividend obligations.
The interview also discussed Strategyโs stock price. The interviewer highlighted that Strategy held 214,000 BTC in March 2024, with its split-adjusted share price at $140. Today, the Bitcoin treasury company holds 850,000 BTC, with its share price still around $140. Flaum explained that investors must look beyond Strategyโs Bitcoin holdings, adding that while the company has increased its Bitcoin per share, its capital structure can influence this metric. Strategy used debt and preferred stock to finance its Bitcoin holdings. However, common stockholders do not have the same claim on company assets as its creditors or preferred shareholders. Flaum argues that dividing Bitcoin holdings by its common shares gives an incomplete picture of shareholder economics.
Striveโs SATS Offering
The interview also discussed Striveโs SATS preferred stock offering. The offering was initially at $500 million, but increased to $700 million because of high demand. Flaum attributed this to retail and institutional interest, adding that retail investors could have viewed SATS as a more attractive alternative to existing preferred instruments. SATS follows a cumulative dividend structure that allows missed payments to accumulate rather than disappear, an improvement over Striveโs non-cumulative STRD offering.
Flaum believes Strive learned from Strategyโs experience and made its capital more streamlined and straightforward. However, he clarified he was not picking favorites, and explained that Strive had the advantage of starting with a cleaner slate, while Strategyโs distinct BTC holdings give it a substantial advantage.
Bitcoin-Backed Preferred Stocks And Government Bonds
Flaum also discussed whether Bitcoin-backed preferred stocks are suited for retirees and investors close to retiring. He highlighted a key distinction between risk and volatility, adding that investors should not equate daily price fluctuations with permanent losses. Flaum said investors must consider their risk appetite and whether they can handle price volatility without being forced to sell their assets.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
