Bitcoin holders should not confuse Michael Saylor’s buying machine with a safety net for their own investment portfolios, said BitMEX founder Arthur Hayes.
Arthur made this point during a May 13 interview with Scott Melker (aka Wolf of All Streets), where he said that Michael’s role is tied to the strategy (MSTR), not the ordinary investors who hold Bitcoin and hope the public company continues to do its bidding forever.
Arthur said Michael is there to protect the strategy, its shareholders and the products built on its balance sheet. “Saylor is not there to protect your Bitcoin wallets.”
Arthur says traders can use STRC to guess when the strategy might buy bitcoin
“We’ll see these little bubbles in Bitcoin, they’re not huge,” Arthur said. “But every time you see that STRC is about to trade above par and go above 100, it’s like you could literally transparently buy $2 billion worth of Saylor in two or three days. Why wouldn’t you want that trade, you know?”
According to Arthur, the tracker indicated that Michael could have made 2,000 Bitcoin purchases once STRC crossed parity. He wants to predict the transaction because it can be observed. As simple as it sounds, there are traders who may try to pre-empt a buying spree as soon as an order comes in from this major player.
On the other hand, Arthur admitted that he had not researched all aspects of corporate finance at STRC. But what makes the strategy different is the fact that only a few organizations are able to develop financial instruments based on Bitcoin. The strategy has the resources to leverage its massive Bitcoin balance sheet, Wall Street offices, and capital market structure.
“I mean I don’t think Strategy is going out of business any time soon. It’s clear from what I understand that it doesn’t have to pay a dividend in STRC. You kind of trust that it will. What happens when you trust in cryptocurrencies. It doesn’t end very well. Not that Saylor does anything bad,” Arthur said.
Michael continues to fund Bitcoin purchases while the strategy manages dividends and debt
The strategy is also working on the debt side, as it moves to buy back about $1.50 billion in convertible securities while continuing to add bitcoin through equity-linked financing, as Cryptopolitan previously reported.
This puts Michael in the middle of more than one job at once: buying bitcoin, managing leverage, maintaining capital flow, and dealing with investors who expect returns.
Michael also pointed out that the old strategy stance of “never sell” may not be as simple as people think. He noted that limited Bitcoin sales could be used to improve Bitcoin’s per-share price and help fund dividends. This is important for Bitcoin investors who have treated Strategy’s holdings like a vault that never opens.
Scott said to Arthur:
“I talked to him (Saylor) on Wednesday morning completely by chance like I had my first interview with him right after he said he was going to sell some Bitcoin. I said to him, ‘Oh, that’s going to be a big fire,’ you know, as if he didn’t say it outright but yeah, shareholders and anyone who buys STRC and the SEC need to hear that Bitcoin is not a depreciated asset when it comes to dividend protection and STRC.”
Scott also said that Michael might have to say he could sell some bitcoins if retail investors get hurt, because the CEO of a public company can’t speak like an anonymous person on X. He joked that saying the wrong thing could lead to legal problems.
Brian Armstrong, CEO of Coinbase Global Inc. (COIN), in the same context. “You know, Brian Armstrong also can’t go out there and say wild things about cryptocurrency prices. He has to actually protect his shareholders.” He said Arthur.
