TLDR:
- A 300bps rate drop could erase nearly $234B in annual MMF income.
- Even 5% MMF rotation may release $390B into higher-yield alternatives.
- STRC’s 11.25% yield positions it for institutional inflows during easing.
- New STRC issuance could translate into large-scale Bitcoin purchases.
Yield Tsunami Bitcoin is gaining attention after investor Adam Livingston projected a sharp capital rotation toward Bitcoin-linked yield vehicles.
In a detailed post on X, Livingston argued that ongoing Federal Reserve rate cuts could erase hundreds of billions in annual income from U.S. money market funds.
He contends that falling short-term yields may push pensions, insurers, and endowments toward higher-yielding listed structures tied to Bitcoin exposure.
Rate Cuts and the Projected $234 Billion Income Compression
Livingston stated that U.S. money market funds hold roughly $7.79 trillion as of mid-February 2026. He noted that current yields near 4.5% to 5% reflect the prior hiking cycle.
However, he argued that an additional 75 to 100 basis points of cuts could reduce front-end rates toward 3% or lower.
According to his calculations, a 300-basis-point decline across $7.79 trillion equates to about $233.7 billion in lost annual income. He described this as a large-scale compression event for conservative capital pools. As yields fall, institutions dependent on fixed income cash flows may reallocate capital.
In his tweet, Livingston called this shift a “trillion-dollar yield tsunami” moving toward Bitcoin-aligned assets. He referenced historical data from the post-2008 and 2020 easing cycles. During those periods, alternative credit and private structures experienced accelerated asset growth.
A TRILLION DOLLAR YIELD TSUNAMI IS COMING STRAIGHT FOR BITCOIN
The Fed is revving up the rate-cut guillotine again.
We're already 125bps into the current easing cycle as of early 2026, with the street pricing in another 75-100bps of bloodletting to get the funds rate down… pic.twitter.com/gRKzPPA3mp
— Adam Livingston (@AdamBLiv) February 21, 2026
He further cited estimates suggesting that even a 5% rotation from money market funds could release nearly $390 billion. A portion of that capital, he argued, may seek liquid high-yield instruments offering double-digit returns.
STRC Structure and the Bitcoin Treasury Feedback Loop
Livingston identified Strategy’s Variable Rate Series A Perpetual Stretch Preferred Stock, trading under STRC, as a potential beneficiary.
The security reportedly pays 11.25% annualized, distributed monthly. It trades near $100 par value and includes a rules-based monthly reset feature.
He reported that STRC has a notional value of about $3.46 billion with average daily trading volume near $128 million.
According to the post, dividend coverage is supported by cash reserves and the strategy’s Bitcoin treasury. The company currently 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. Larger inflows would increase that figure proportionally.
He also modeled broader scenarios. A 5% rotation from money market funds with a 10% STRC capture rate could imply $39 billion in inflows.
That level, based on his figures, would represent hundreds of thousands of additional BTC purchases. Yield Tsunami Bitcoin remains central to his thesis that rate compression may indirectly expand institutional Bitcoin exposure through listed yield vehicles.
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