Criticism of Saylor's Strategy to Acquire All Bitcoin

Michael Saylor's recent proclamation that his company, Strategy (previously MicroStrategy), plans to acquire all available Bitcoin has drawn sharp criticism from Peter Schiff. This negative response came after Saylor's firm made its largest Bitcoin purchase in several months.

Key Takeaways

Michael Saylor aims to buy as much Bitcoin as possible, claiming "we are going to buy all of it."
His keynote at the Bitcoin MENA conference attracted over 10,000 attendees, including influential figures from finance.
Saylor views Bitcoin as a "programmable, scarce asset" crucial for economic sovereignty.
Peter Schiff criticizes Saylor's approach to converting Bitcoin into "digital credit" through preferred stock.
Schiff argues that the promised yield is at risk if Bitcoin’s value fails to keep rising.

Saylor’s 'Buy Every Bitcoin' Strategy Mocked by Schiff

Main Content

During the Bitcoin MENA conference, Saylor delivered a 45-minute address emphasizing his objective for MicroStrategy: to acquire Bitcoin aggressively. He confidently declared, "We are going to buy all of it." The event attracted a significant audience, with more than 10,000 participants, including representatives from sovereign wealth funds, banking institutions, family offices, and hedge fund managers from the Middle East.

Saylor's discussion aimed to outline a vision for transforming the region into a central hub for financial systems supported by Bitcoin. He referred to Bitcoin as "digital energy," describing it as a scarce and programmable asset that could usher in a new era of economic independence.

In a subsequent social media post, Peter Schiff criticized Saylor's approach of converting Bitcoin into "digital capital" and then into "digital credit" through the issuance of preferred stock by MicroStrategy. This stock provides an 8% perpetual dividend underpinned by the company's substantial holdings of 650,000 BTC, which were purchased at an average price of $74,000 per Bitcoin.

Schiff contends that Saylor's concept of an 8% yield is flawed and only works "in his head." According to Schiff, the yield relies on the assumption that Bitcoin's price will perpetually increase. Should Bitcoin's value stop appreciating, it could jeopardize the entire investment strategy. Schiff's main argument is that there is no solid cash-flow-producing asset behind the claimed yield, which underlines his skepticism.

In summary, while Saylor vigorously promotes his intention to dominate the Bitcoin market and leverage it for financial innovation, critics like Schiff raise valid concerns about the sustainability and realism of such strategies in the volatile world of cryptocurrency.