Michael Saylor’s Crypto Machine Stacks a New Layer of Leverage

The leverage-to-buy-Bitcoin model pioneered by Michael Saylor’s Strategy Inc. has spawned yet another web of startups tied to its fortunes — all of them exposed if Bitcoin falls.

The market remains niche — at least three issuers of what are effectively stablecoins and who collectively manage more than $100 million - have emerged since January. Each token is backed primarily by Strategy’s “Stretch” perpetual preferred shares, a hybrid security that pays a junk bond equivalent yield.