Bitcoin's latest slide has revived a question that has been sitting beneath the surface of the market for months: How much of Bitcoin's support is actually Bitcoin demand — and how much of it is tied to Strategy's ability to keep buying?
For Mike Green, chief strategist at Simplify ***** et Management, the answer remains one of the biggest unresolved risks in crypto.
Green has been warning that Michael Saylor's plans to issue debt to acquire more Bitcoing at Strategy is not simply a bullish corporate treasury bet. In his view, it is levered exposure to a highly volatile ***** et that only works as long as Bitcoin keeps rising, but becomes increasingly fragile when the price moves the other way. And with Bitcoin moving closer to $60,000 after trading near $75,000 when Green last joined Coinage, he says the underlying risk has not gone away.
"Nothing has changed," Green told Coinage this week. "He has still adopted an extraordinary levered exposure. He will always need to sell Bitcoin in order to obtain liquidity. Unless Bitcoin rises enough that he can increase his borrowing capacity against it."
That is the problem Green has been trying to highlight. Strategy's Bitcoin position is often treated by the market as a simple accumulation story: Michael Saylor buys Bitcoin, Strategy raises capital, the company buys more Bitcoin, and the cycle reinforces itself as long as the price goes up. But Green argues that the same structure can become dangerous in reverse.
For Mike Green, chief strategist at Simplify ***** et Management, the answer remains one of the biggest unresolved risks in crypto.
Green has been warning that Michael Saylor's plans to issue debt to acquire more Bitcoing at Strategy is not simply a bullish corporate treasury bet. In his view, it is levered exposure to a highly volatile ***** et that only works as long as Bitcoin keeps rising, but becomes increasingly fragile when the price moves the other way. And with Bitcoin moving closer to $60,000 after trading near $75,000 when Green last joined Coinage, he says the underlying risk has not gone away.
"Nothing has changed," Green told Coinage this week. "He has still adopted an extraordinary levered exposure. He will always need to sell Bitcoin in order to obtain liquidity. Unless Bitcoin rises enough that he can increase his borrowing capacity against it."
That is the problem Green has been trying to highlight. Strategy's Bitcoin position is often treated by the market as a simple accumulation story: Michael Saylor buys Bitcoin, Strategy raises capital, the company buys more Bitcoin, and the cycle reinforces itself as long as the price goes up. But Green argues that the same structure can become dangerous in reverse.
4 months ago
