Michael Saylor, co-founder of MicroStrategy, continues his bold Bitcoin strategy unabated despite division among analysts. While supporters praise his approach as visionary, critics warn that the company’s heavy reliance on Bitcoin puts it at major financial risk.
MicroStrategy’s Growing Bitcoin Portfolio
MicroStrategy currently owns 447,470 Bitcoin, making it the largest corporate holder of the cryptocurrency worldwide. This strategy started in 2020 with a $250 million purchase and later expanded to billions through loans and equity issuances. Recently, the company announced a plan to raise $42 billion over the next three years to buy more Bitcoin and develop new crypto initiatives.
According to Saylor, the goal is simple: continue investing in Bitcoin as a long-term strategy. He compares his approach to real estate developers in Manhattan, who finance their growth with debt against the value of their real estate.
Criticism of the risk
Not everyone is convinced of Saylor’s approach. Analysts such as David Krause warn that a sharp drop in the Bitcoin price could be disastrous for MicroStrategy, resulting in potential financial problems and shareholder dilution. On social media, some are even comparing this strategy to a Ponzi scheme, although experts like Bitget’s Gracy Chen emphasize that the company relies on market-driven increases in value, not new investors.
In addition, the lack of a clear exit strategy is criticized by critics. Yet Bitcoin maximalists do not see this as a problem, because they view Bitcoin as the ultimate exit from traditional financial systems.
Impact on the market
Despite the risks, MicroStrategy’s approach has increased the value of its shares by 2,200% since its first Bitcoin purchase in 2020. This success has not only boosted MicroStrategy’s share price, but also inspired Bitcoin adoption worldwide. Companies such as Marathon Digital and Galaxy Digital have embraced similar strategies.
Michael Saylor remains optimistic and sees Bitcoin as the core of MicroStrategy’s strategy, both as a store of value and a capital generation tool.
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Source: https://newsbit.nl/microstrategys-risicovolle-bitcoin-strategie-slimme-zet-of-gevaarlijk-spel/
