Some thoughts on the landscape of Bitcoin-backed fixed-income securities, and the endgame coming into focus. To rewind a bit, let me take you back to 2021, the manic phase of the COVID bull market. I had just begun a full-time position writing research for Bitcoin Magazine Pro (then called The Deep Dive), an analytics focused newsletter focused on the Bitcoin market. At that time, a dominant market talking point among Bitcoiners was “contango,” the phenomenon of futures trading at a premium to the spot price for a commodity. That premium is common in commodity markets because of physical constraints such as storage and seasonality, but none of those constraints exist for BTC. There is no storage cost, the future supply schedule is known with certainty, and the asset is intangible and indestructible. Many found it confounding that a 20-30% annualized return could be made simply by buying spot BTC and shorting the futures contract. For those unfamiliar with the mechanics, if you buy 1 BTC and short 1 BTC of futures (posting the spot BTC as collateral), you hold a synthetic-dollar position that pays a variable yield. Baseline funding on perpetual futures is about 10% APR, meaning that if spot and futures trade exactly in tandem the synthetic dollar yields roughly 10%. During the leverage frenzy of 2021, those yields rose to more than 40%. I was convinced the bond market would not stand idle while Bitcoin hyper-monetized in a zero-rate environment. My naive hypothesis was that Wall Street would imminently arrive to capture the spread by taking delta-neutral positions, long spot and short futures, thus outperforming anything in traditional fixed income. That view was flawed for two main reasons: 1) The plumbing was not ready: no serious institutional capital was going to log in to Binance or FTX to run this trade. 2) Even with a friendly regulatory landscape and secure platforms, most capital lives under strict mandates that prohibit such activity. Instead of a wave of institutional arbitrage, the contango premium collapsed under its own weight as the underlying bull-market leverage unwound. Demand to short fiat and long BTC dried up, and the most levered crypto firms imploded, mainly driven by altcoin based leverage and loan rehypothecation. After the 2022 bear market, the clean-up process began. Bad actors disappeared, BlackRock filed for a spot ETF in mid-2023, and the institutional tide started to shift. By 2024 both legs of the contango trade were finally available on Wall Street. Institutions could go long via SEC-approved spot ETFs and go short via CME futures, capturing a roughly 5-15% annualized spread with full regulatory oversight. Yet fixed-income capital still stayed away. The players harvesting that basis were prop funds, not the massive pools of fixed-income capital, as their mandates prohibited such activities. Something was still missing. For a while I thought convertible bonds issued by operating companies might be the bridge. Volatility could be the transmuting variable that lets Bitcoin-backed optionality outcompete traditional cash-flow bonds. But the convert market is opaque, infrequent, relatively illiquid, and much smaller than the depths where fixed-income giants swim. The endgame revealed itself in 2025. It finally clicked when MicroStrategy launched its first perpetual preferred equity offering. Suddenly the fiat-denominated bond-market endgame came into focus. Massive fixed-income pools were never going to post BTC on a futures exchange to hold a synthetic-dollar position, no matter how attractive the yield. Even when that contango trade offered 40% in 2021, it didn’t matter. MicroStrategy’s Bitcoin-backed preferred equity solved this. The instrument is issued in dollars, MSTR buys BTC up front, the pref ranks senior to common equity, is registered with the SEC, is transparently over-collateralized, and pays a fixed dividend that does not evaporate when dynamic funding rates collapse. In effect it is an infinite-duration BTC<>USD swap contract, wrapped in a bond like instrument. Interestingly, the “crypto-complex” has spent billions attempting to create such product-market fit. Ideas such as synthetic stablecoins built upon perpetual swap contracts - which never really landed with much effect in TradFi. Here is @_Checkmatey_ and I discussing the hypothetical product-market fit of a synthetic instrument collateralized by BTC that pays yield based on a perpetual futures contract… Sound familiar? Outside of raw spot BTC itself, I’ve often stated that the “golden goose” in crypto was who was going to be first to figure out how to seamlessly build a secure vehicle that provides USD yield and stable USD exposure to investors who want to take the other side of the trade as the long perpetual futures traders… Well, Saylor figured it out (shocker).... MSTR is going long spot BTC (in massive size) and selling the short leg of a perpetual swap to the 100T fixed-income market. STRF pays roughly a 10% dividend and is secured by Bitcoin collateral. It offers far greater legal protection, transparency, and stability than any offshore perpetual swap ever has. These instruments are built to capitalize on the fiat system’s inherent design: 21,000,000 BTC versus an unlimited and ever-expanding supply of currency units. The contango narrative of 2021 and its perceived 2nd & 3rd order effects on the fixed income markets was simply ahead of its time. To conclude: Bitcoin-backed perpetual preferred is the golden goose. And Saylor caught it. The gates of Troy have been breached.