MicroStrategy hits $40b in Bitcoin, Saylor draws criticism

A prominent investment expert has raised concerns about MicroStrategy’s aggressive Bitcoin accumulation strategy, even as the company’s holdings reach $40.01 billion.

The warning comes as the company’s portfolio shows unrealized gains of 70.35% ($16.52 billion) on its total investment.

Gavin Baker, managing partner and chief investment officer of Atreides Management LP, highlighted the potential risks of MicroStrategy’s debt-fueled Bitcoin (BTC) acquisition strategy during a recent All-In podcast appearance.

The company, under the leadership of Michael Saylor, has accumulated 402,100 BTC. Baker specifically warned about the growing disparity between MicroStrategy’s annual revenue of $400 million and its growing interest charges tied to Bitcoin-backed debt.

“No tree grows to the sky,” Baker warned. He suggested that the strategy of continually issuing debt to buy Bitcoin could become unsustainable if debt investors lose confidence in this approach.

Baker’s concerns focus on the potential collapse of what he calls the “magic money-making machine.” If Saylor’s strategy becomes too large relative to MicroStrategy’s core business capability, oversizing could result in major risks to the company’s financial stability.

Saylor continues to accumulate Bitcoin

Despite these warnings, Saylor maintains his commitment to Bitcoin accumulation. In a recent interview with Yahoo Finance, he reaffirmed his consistent message for four years: “Every day for the last four years, I’ve said buy Bitcoin, don’t sell Bitcoin. I’m going to buy more Bitcoin. I will buy Bitcoin at the top forever.

Saylor advocates a long-term investment approach. He recommended that investors consider Bitcoin as a capital asset with a minimum holding period of four years, preferably ten years. He also spoke about the importance of dollar cost averaging and maintaining perspective during times of short-term market volatility.

The MicroStrategy president further defended his strategy by highlighting the company’s success in generating shareholder value through BTC holdings. “MicroStrategy makes a lot of money owning this digital property. We thus generate enormous amounts of shareholder value.

The different perspectives on MicroStrategy’s strategy emerge as BTC hits new milestones, recently crossing the $100,000 mark to reach $103,900.