{"id":18087,"date":"2024-10-25T17:00:00","date_gmt":"2024-10-25T14:00:00","guid":{"rendered":"https:\/\/forklog.com\/en\/not-the-father-how-michael-saylor-alienated-the-bitcoin-community\/"},"modified":"2024-10-25T17:00:00","modified_gmt":"2024-10-25T14:00:00","slug":"not-the-father-how-michael-saylor-alienated-the-bitcoin-community","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/not-the-father-how-michael-saylor-alienated-the-bitcoin-community\/","title":{"rendered":"Not the father: how Michael Saylor alienated the bitcoin community"},"content":{"rendered":"<p>Few would have expected Vitalik Buterin to join the bitcoiners chastising Michael Saylor.<\/p>\n<p>The trigger for the backlash was an <a href=\"https:\/\/youtu.be\/DevkAbG1mGc?feature=shared\" target=\"_blank\" rel=\"noopener\" title=\"\">interview<\/a> the MicroStrategy founder gave to the Markets with Madison podcast. In it Saylor explicitly promoted state regulation and the storage of bitcoin in organisational accounts rather than personal wallets. He branded the camp defending censorship-resistance \u201cparanoid crypto-anarchists\u201d.<\/p>\n<p>Buterin, in turn, <a href=\"https:\/\/x.com\/VitalikButerin\/status\/1848876323026178429\" target=\"_blank\" rel=\"noopener\" title=\"\">called<\/a> Saylor\u2019s comments \u201cbatshit insane\u201d and argued that the businessman is pushing the idea of cryptocurrencies being held by organisations controlled by the state and law enforcement. As examples of such cooperation with the authorities, the Ethereum founder cited BlackRock and <a href=\"https:\/\/forklog.com\/en\/news\/fidelity-suggests-allocating-1-5-of-capital-to-bitcoin\">Fidelity<\/a>.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">I probably did more than most to spread the &#8220;mountain man&#8221; trope (btw I consider those remarks of mine outdated; snarks and AA changed the tradeoff space completely), and I&#8217;ll happily say that I think <a href=\"https:\/\/twitter.com\/saylor?ref_src=twsrc%5Etfw\">@saylor<\/a>&#8216;s comments are batshit insane.<\/p>\n<p>He seems to be explicitly arguing for a\u2026<\/p>\n<p>\u2014 vitalik.eth (@VitalikButerin) <a href=\"https:\/\/twitter.com\/VitalikButerin\/status\/1848876323026178429?ref_src=twsrc%5Etfw\">October 22, 2024<\/a><\/p><\/blockquote>\n<p> <script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>Even the fiercest advocates of bitcoin, decentralisation and personal responsibility for one\u2019s finances are tested by time\u2014like every project in the market.<\/p>\n<p>In crypto\u2019s Lindy law: the longer a blockchain runs, the stronger both the technology and its community become. If bitcoin has survived the past 15 years, it is likely to persist for the next 15. The same holds for market actors promoting one idea or another.<\/p>\n<p>For many it came as a surprise that Saylor was not the man to rely on. Yet he never was, as he openly admitted. Few grasped what exactly the pseudo-bitcoiner\u2019s plan amounted to.<\/p>\n<p>Back in 2020 Saylor <a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2020-09-22\/ceo-says-bitcoin-is-safer-after-moving-firm-s-cash-to-crypto\" target=\"_blank\" rel=\"noopener\" title=\"\">stated<\/a> to Bloomberg that he was not a consistent supporter of cryptocurrencies and that, for example, if bond yields jumped, he would dump digital gold without hesitation. Many likely missed that interview in those \u201cdistant\u201d years.<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>\u201cWe can liquidate it [bitcoin] any day of the week, any time of day. If I needed to liquidate $200 million worth of bitcoin, I could even do it on a Saturday,\u201d Saylor said.<\/p>\n<\/blockquote>\n<p>At the time he said the first cryptocurrency was merely an asset with a positive real return his team had found. And if the MicroStrategy founder has not changed since, it is unlikely he will turn into a champion of decentralisation by, say, 2030.<\/p>\n<p>Saylor also admitted that when he discussed the matter with ten major shareholders, most reacted \u201cvery favourably\u201d. And among MicroStrategy\u2019s shareholders are the very parties that actively push instruments based on cryptocurrencies:<\/p>\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh7-qw.googleusercontent.com\/docsz\/AD_4nXfuG7FAWUpjtBd0k6081x-zepXYBfpU9vjnWFkCTPZ0C1EwK_sLJMJLdAYq5G5rf9GaS1za8_gOOCON07RK3560Ttdj7HgUDtoeBfj_L3afCQORptmm5W96NOe7pZXXu9JALA9TREZdvHfhlE5cf3HAy-c?key=ZqE1PKJidWe0BzERuVvQ3w\" alt=\"\u041e\u043a\u0430\u0437\u0430\u043b\u0441\u044f \u043d\u0435 \u043e\u0442\u0446\u043e\u043c. \u041a\u0430\u043a \u041c\u0430\u0439\u043a\u043b \u0421\u044d\u0439\u043b\u043e\u0440 \u043d\u0430\u0441\u0442\u0440\u043e\u0438\u043b \u043f\u0440\u043e\u0442\u0438\u0432 \u0441\u0435\u0431\u044f \u0431\u0438\u0442\u043a\u043e\u0438\u043d-\u0441\u043e\u043e\u0431\u0449\u0435\u0441\u0442\u0432\u043e\"\/><figcaption class=\"wp-element-caption\">Data: U.S. Securities and Exchange Commission (<a href=\"https:\/\/www.sec.gov\/Archives\/edgar\/data\/1050446\/000119312521117745\/d64521ddef14a.htm#rom64521_712\">SEC<\/a>).<\/figcaption><\/figure>\n<h2 class=\"wp-block-heading\">A history lesson from Saylor<\/h2>\n<p>In his latest Markets with Madison interview, Saylor dismissed the prospect of government expropriating bitcoin, offering a curious argument: the 1933 law seizing citizens\u2019 physical gold in the United States produced no practical results.<\/p>\n<p>It was this order that allowed the authorities to require private individuals and corporations to hand over all their gold coins, bars or certificates if \u201csuch action is necessary to protect the financial system\u201d.<\/p>\n<p>President Roosevelt issued the order on April 5. It required that by May 1, 1933, all citizens\u2019 gold holdings be exchanged for paper money at $20.66 per ounce at authorised banks in the United States. (Many years later, the day the document was signed and the year it was repealed were chosen as the date of birth of bitcoin\u2019s creator, Satoshi Nakamoto.)<\/p>\n<p>And in the very next year, 1934, Roosevelt announced the confiscation of gold from banks in exchange for certificates that could not be redeemed for the precious metal.<\/p>\n<p>More ironic still, the MicroStrategy founder intends to bequeath his bitcoins to humanity after his death, following the example of Satoshi Nakamoto.<\/p>\n<p>\u201cI am single, I have no children\u2014one day I will be gone. Just as Satoshi left the Universe 1 million BTC, so will I leave civilisation everything that I have,\u201d the \u201cbitcoin maximalist\u201d said.<\/p>\n<p>Saylor either deliberately or out of ignorance (which is doubtful) downplays the largest robbery of the population (1933) and, as its continuation, the largest robbery in the world (1971) by the U.S. government.<\/p>\n<p>This is the ideological foundation of digital gold: there can be no compromise between personal ownership of assets and arbitrary censorship of any format.<\/p>\n<p>Precisely because there were, are and will be precedents for taking property from the public\u2014directly or via the banking sector\u2014bitcoin has evolved all this time. Without painting the most dystopian scenarios, today the adoption of institutional instruments such as ETFs leads to:<\/p>\n<ul class=\"wp-block-list\">\n<li>keeping bitcoin with a third party;<\/li>\n<li>building a derivatives market instead of personal buying;<\/li>\n<li>censorship at the regulator\u2019s first snap.<\/li>\n<\/ul>\n<p>All this leaves digital gold in a sorry state.<\/p>\n<h2 class=\"wp-block-heading\">Following in Grayscale\u2019s footsteps<\/h2>\n<p>Saylor\u2019s \u201cbitcoin bank\u201d merely apes the creation of Barry Silbert, who founded Grayscale and first implemented the idea of earning safely off digital gold.<\/p>\n<p>The scheme involved issuing company shares (GBTC) that trade on the stock market, embedding \u201clive\u201d BTC into the share-issuance mechanism. Unlike an ETF, the shares trade freely without being pegged to bitcoin\u2019s price, functioning as entirely independent instruments.<\/p>\n<p>This allows Saylor\u2019s company to sell and create securities with nominal backing by the first cryptocurrency. He is not obliged to back each share with bitcoin by registering a dedicated fund\u2014the \u201cbitcoin maximalist\u201d simply says he will buy more digital gold with part of the proceeds from selling securities.<\/p>\n<p>If BlockFi, Celsius and <span data-descr=\"Three Arrows Capital\" class=\"old_tooltip\">3AC<\/span> overplayed their hands with the hundreds of millions posted as collateral on GBTC shares, Saylor controls all his speculative chains himself.<\/p>\n<p>By his own account, the approach to investing in bitcoin is about exploiting arbitrage opportunities, not what investors thought when they heard him say HODL.<\/p>\n<p>Put simply, the earning strategy is straightforward. It consists in using a <a href=\"https:\/\/forklog.com\/en\/news\/delta%e2%80%91neutral-synthetic-dollars-why-the-usde-stablecoin-matters\">delta\u2011neutral<\/a> position: open a long and a short simultaneously, then after six months or a year cash in the premium, repay the debts and raise new capital for another speculative cycle.<\/p>\n<p>It is, in its way, a clever solution. But Saylor has been steadfast and open that he is no friend to cryptocurrencies in general or bitcoin in particular. He merely devised and executed a profitable strategy. Time will tell how durable it is.<\/p>\n<h2 class=\"wp-block-heading\"><strong>P.S.<\/strong><\/h2>\n<p>After a torrent of criticism, the MicroStrategy founder did <a href=\"https:\/\/x.com\/saylor\/status\/1849132234692833436\" target=\"_blank\" rel=\"noopener\" title=\"\">acknowledge<\/a> the value of self-custody of bitcoin, defining it as a benefit \u201cfrom all forms of investment\u201d in digital gold. That only reinforces the point about the speculative nature of Michael Saylor\u2019s business strategies.<\/p>\n<p><em>Text: Oleg Cash Coin<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Few would have expected Vitalik Buterin to join the bitcoiners chastising Michael Saylor. The trigger for the backlash was an interview the MicroStrategy founder gave to the Markets with Madison podcast. In it Saylor explicitly promoted state regulation and the storage of bitcoin in organisational accounts rather than personal wallets. He branded the camp defending [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":18086,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"","news_style_id":"","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[1144],"tags":[18,1156,1208],"class_list":["post-18087","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-longreads","tag-bitcoin","tag-institutional-investors-and-whales","tag-michael-saylor"],"aioseo_notices":[],"amp_enabled":true,"views":"65","promo_type":"","layout_type":"","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/18087","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/comments?post=18087"}],"version-history":[{"count":0,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/18087\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media\/18086"}],"wp:attachment":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media?parent=18087"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/categories?post=18087"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/tags?post=18087"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}