Michael Saylor, the executive chairman of MicroStrategy and a prominent advocate for Bitcoin, is facing criticism for his recent comments recommending Bitcoin custodianship through large financial institutions, a position at odds with his previous support for self-custody.
In an October 21 interview with Madison Reidy, Saylor argued that Bitcoin holders have nothing to lose by entrusting their Bitcoin to “too big to fail” banks rather than relying on hardware wallets for self-custody.
Bitcoin Community Lashes Out on Saylor
Saylor’s remarks have drawn widespread criticism from the Bitcoin community, particularly because he has long championed self-custody, even calling it essential to preventing powerful custodians from corrupting the Bitcoin network.
In a notable departure from his earlier views, Saylor dismissed concerns about state-sanctioned Bitcoin seizures, labelling those who fear such scenarios as “paranoid crypto-anarchists.” He referred to the idea of Bitcoin confiscation by governments as a “myth,” claiming that it was better to rely on financial institutions engineered to be custodians of financial assets.
Supporters of Bitcoin reacted quickly, with many accusing Saylor of undermining financial autonomy, which is the foundational idea of Bitcoin. Instead of promoting Bitcoin’s use as a decentralised currency, Sina, the founder of the Bitcoin custody company 21st Capital, asserted that Saylor’s recent remarks imply he is on a mission to reduce it to an “investment petrock.”
In a similar vein, Saylor’s support for institutional custody may be consistent with MicroStrategy’s long-term objective of turning into a Bitcoin bank, according to author and original Bitcoiner Simon Dixon.
According to Dixon, this change might be an attempt to support MicroStrategy’s business plan of providing Bitcoin-backed collateralised loans. To preserve their financial independence from conventional banks and governments, he urged Bitcoiners to keep advocating for self-custody.
John Carvalho, CEO of Bitcoin payments company Synonym, echoed the sentiment, highlighting Saylor’s inconsistency. Carvalho pointed out that Saylor once promoted Bitcoin as “hope” for everyone, emphasizing that self-custody would protect against corruption by powerful custodians.
After the collapse of FTX in 2022, Saylor famously argued that Bitcoin self-custody was crucial for maintaining a decentralized network, even advising people to safeguard their 12-word seed phrases against external threats.
Not Everyone is Against Saylor
Saylor’s attitude was not universally criticised. Some pointed out that his statement might have been meant more for institutional investors than for average Bitcoin owners.
According to Julian Figueroa, the creator of the podcast “Get Based,” hardware wallets and self-custody techniques are unlikely to be used by big organisations with hundreds of workers, pension funds, or wealth funds. It is more sensible for these kinds of organisations to rely on Bitcoin banks.
The financial performance of MicroStrategy has been excellent lately. Due to the company’s successful integration of Bitcoin with conventional financial markets, its market capitalisation soared from $1.5 billion to over $40 billion in just four years.
Saylor clarified in a recent interview that by issuing securities backed by digital capital, MicroStrategy is “pioneering a new market.” Because MicroStrategy’s plan offers “more Bitcoin per share,” Saylor claims that Bitcoiners who believe in the long-term value of Bitcoin’s growth with some volatility are drawn to the company.