Analysts Warn Michael Saylor's Bitcoin Strategy May Harm Price Action and Community
Analysts from Samosa Capital Investment Fund have raised concerns that Michael Saylor’s Bitcoin (BTC) strategy through MicroStrategy (rebranded as Strategy) is negatively affecting Bitcoin’s price action and posing a net-negative impact on the Bitcoin community.
Strategy currently holds 649,870 BTC, but approximately 40% of these holdings are in the red following recent purchases. Notably, the firm has acquired 8,178 BTC at an average cost of $102,171 per BTC, which is roughly 10% above current market prices. Critics, including Vinny Lingham, warn that this strategy may cause more damage to Bitcoin than incidents such as the FTX collapse. Approximately 9% of all BTC is now held in US ETFs or government treasuries, which some argue dilutes Bitcoin’s censorship-resistant role.
Since early October, Bitcoin has dropped over 25%. Observers note that Saylor has been notably quiet during these downturns, in contrast to his previous practice of buying during rallies. Analysts suggest a pattern where the firm buys high but remains inactive during price discounts, with MicroStrategy’s holdings and Digital Asset Trusts seen as diluting Bitcoin’s sovereign and censorship-resistant function.
According to analysis by GrokAI, MicroStrategy could face serious difficulties only if Bitcoin’s price falls near $12,650. The company carries approximately $8.22 billion in debt; however, its convertible notes lack strict covenants, so immediate liquidation is unlikely. Saylor has asserted that MicroStrategy could endure an 80-90% BTC price decline and still remain overcollateralized.
Meanwhile, Peter Schiff and Michael Saylor are scheduled to speak at Binance Blockchain Week in Dubai in early December. Schiff has described Strategy as a fraud and predicted a potential bankruptcy for MicroStrategy.
