Is Saylor’s leveraged Bitcoin play hurting the market?
Ross Gerber has renewed his criticism of Strategy founder Michael Saylor, saying the company’s financing model is hurting Bitcoin.
The chief executive of Gerber Kawasaki made the claim after Saylor posted an AI-generated video titled “The Right to Bear Arms.” Gerber replied that Saylor was “destroying Bitcoin,” but he did not provide data showing that Strategy alone caused the market’s recent losses.
The latest remark follows Gerber’s earlier attacks on Strategy’s treasury plan. In June, he accused Saylor of creating a “negative cycle” by selling Bitcoin after promoting a long-term holding message. He also used the term “rug pull” for the company’s actions. Those comments represent Gerber’s view. Public filings do not describe Strategy’s sales as fraud or market manipulation.
Criticism centers on leverage and value creation
Gerber’s main complaint concerns the use of financial markets to increase Bitcoin exposure. Strategy has issued common shares, preferred stock and convertible notes to raise funds. It has used much of that capital to buy Bitcoin. Gerber argues that this process adds obligations without creating an operating asset that produces cash.
He also says investors can gain Bitcoin exposure through regulated exchange-traded funds instead of buying Strategy shares. Gerber has promoted active ETFs as a way to manage capital gains.
Tax outcomes vary by fund structure and investor circumstances, so his statement does not apply equally to every holder. Strategy says its model combines Bitcoin reserves with equity and credit products rather than copying a spot ETF.
Strategy’s Bitcoin sales fuel the dispute
As crypto.news reported, Strategy sold 3,588 BTC for about $216 million between June 29 and July 5. The company used the proceeds to fund dividends on several preferred stock products. After the sale, Strategy held 843,775 BTC and $2.55 billion in dollar reserves.
The transaction followed a wider plan that allows up to $1.25 billion in Bitcoin sales for liquidity needs. The company sold the coins below its average acquisition cost, according to disclosed figures, adding to debate over whether recurring payments could force more sales during weak markets.
The sale gave Gerber fresh material for his criticism because Saylor had spent years promoting a buy-and-hold approach. However, Strategy had already changed its public position. In May, Saylor said a Bitcoin sale before year-end was “not unlikely.” As previously reported, the company sold 32 BTC in late May, then bought 1,550 BTC and later added another 1,587 BTC.
Strategy supporters reject Gerber’s claims
Supporters reject Gerber’s description of the model. Blockstream chief executive Adam Back said limited Bitcoin sales showed treasury flexibility rather than weak conviction. He argued that Strategy could use part of its reserve to meet investor payments while keeping Bitcoin at the center of its balance sheet. The company remains the largest public corporate holder of Bitcoin despite its recent sales.
Questions remain over how Strategy’s capital structure performs during a prolonged market decline. The company’s enterprise value had fallen below the value of its Bitcoin holdings for the first time. Its preferred products also create recurring dividend needs.
