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Bitcoin is drawing renewed attention from some investors after Adam Livingston projected a sharp “capital rotation” toward Bitcoin-linked yield vehicles, driven by expectations for Federal Reserve rate cuts.
In a post on X, Livingston argued that additional Federal Reserve easing could reduce the income generated by U.S. money market funds, potentially encouraging institutions to seek higher-yielding alternatives.
He said U.S. money market funds hold roughly $7.79 trillion as of mid-February 2026, with current yields near 4.5% to 5% reflecting the prior hiking cycle. Livingston estimated that another 75 to 100 basis points of cuts could push front-end rates toward 3% or lower.
Using his calculations, a 300-basis-point decline across $7.79 trillion would equate to about $233.7 billion in lost annual income. He described this as a “compression event” for conservative capital pools, suggesting that institutions reliant on fixed-income cash flows may reallocate toward higher-yielding listed structures with Bitcoin exposure.
Livingston also referenced historical easing periods, citing post-2008 and 2020 cycles in which alternative credit and private structures saw accelerated asset growth.
Livingston pointed to Strategy’s Variable Rate Series A Perpetual Stretch Preferred Stock, trading under STRC, as a potential beneficiary. He said the security pays 11.25% annualized, distributed monthly, and trades near $100 par value with a rules-based monthly reset feature.
He reported that STRC has a notional value of about $3.46 billion and average daily trading volume near $128 million. Livingston said dividend coverage is supported by cash reserves and the strategy’s Bitcoin treasury, which he stated holds more than 717,000 BTC.
Livingston estimated that a 0.5% capture of projected alternative inflows could generate $2 to $4 billion in new STRC issuance. At Bitcoin prices near $68,000, he calculated that each $1 billion raised could acquire roughly 14,700 BTC, with larger inflows increasing that amount proportionally.
He also modeled a broader scenario: a 5% rotation from money market funds with a 10% STRC capture rate could imply $39 billion in inflows. Based on his figures, that would translate into hundreds of thousands of additional BTC purchases.
Bitcoin remains central to Livingston’s thesis that rate compression could indirectly expand institutional Bitcoin exposure through listed yield vehicles such as STRC, as conservative yield seekers look for higher returns when money market yields decline.
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