|
 |
The Bitcoin Evangelist’s High-Stakes Gamble
Michael Saylor is either going to be right or wrong in a big way
|
| |||||||||||||||
The Capitalist is a reader-supported publication
Reject Corporate Left Wing Journalism
In the spring of 2000, Michael Saylor watched his personal fortune evaporate in a single day. As co-founder and CEO of MicroStrategy, a business-intelligence software company he had built from scratch, Saylor saw the firm’s stock plummet more than 60 percent after an SEC investigation revealed aggressive accounting practices that had inflated revenues during the dot-com frenzy.
The collapse erased roughly $6 billion in market value overnight, slashing Saylor’s net worth from billions to a fraction of that. It was one of the starkest personal losses of the bubble era, a cautionary tale of over-leveraged ambition in a speculative mania.
 |
Two and a half decades later, Saylor has reemerged as perhaps the most vocal and committed advocate for Bitcoin in the corporate world. No longer merely a software executive, he has repositioned his company—now rebranded as Strategy—as a de facto Bitcoin investment vehicle.
The strategy is audacious: use the company’s equity and ability to take on debt to fund and amass Bitcoin at scale, treating it as a superior store of value to cash holdings amid inflation and currency debasement.
Saylor’s thesis is straightforward and unyielding: Bitcoin is digital gold, scarce, decentralized, and destined to appreciate over the long term as fiat currencies erode. He has articulated this view in countless interviews, podcasts, and X posts, framing Bitcoin not as speculation but as an inevitable monetary evolution. One that Microstrategy would eventually emerge from as the apex predator.
The pivot began in August 2020, when MicroStrategy announced its first major Bitcoin purchase: 21,454 coins for about $250 million. At the time, Bitcoin traded around $11,000, and the move was framed as a hedge against cash depreciation in a low-interest-rate world. What followed was relentless accumulation and the use of any and all means to achieve it. Through convertible debt offerings, at-the-market share sales, and other financing tools, the company bought during dips and rallies alike.
By early February 2026, Strategy held 713,502 Bitcoin, acquired at an average price of approximately $76,052 per coin, for a total cost basis of around $54.26 billion according to Strategy’s own Strategy Bitcoin Purchases page. This represents more than 3.4 percent of Bitcoin’s total fixed supply of 21 million coins according to The Block.
The mechanics of this buildup are as financial as they are ideological. Strategy’s stock (MSTR) became a leveraged proxy for Bitcoin exposure. Investors buying shares effectively gained amplified upside (and downside) to Bitcoin’s price movements, often at a premium to the underlying holdings. The company raised capital by issuing shares or convertible notes when the stock traded richly—sometimes at 1.5x or more the net asset value of its Bitcoin—and deployed those proceeds to buy more coins.
This created a feedback loop: rising Bitcoin prices boosted the stock, enabling more issuance and purchases, which in turn supported further price gains.
Central to this structure is the concept of a “liquidation price.” Unlike margin traders who face forced sales at predefined thresholds if an investment goes bad, Strategy’s Bitcoin is largely unencumbered—with no direct collateral calls on the holdings themselves. However, much of its debt is leveraged against the value of Strategy its self through convertible notes and share issuances, and aggressive dilution or covenant breaches of those could bring extreme pressure against the firm itself in “extreme” scenarios. The question yet to be answered is how “extreme” does a scenario have to be to be considered “extreme?”
Analysts have calculated “theoretical liquidation levels” based on debt divided by holdings; earlier estimates placed it far lower, around $20,000 per Bitcoin in prior years when debt was smaller relative to holdings according to 21Shares Research.
The real risk is subtler: The best way for Saylor to combat a fall in Bitcoin prices would be to acquire more of them at a lower price, bringing his overall average cost down and spreading the investment across more coins.
However sustained low Bitcoin prices erode the stock’s premium over net asset value, making new equity raises dilutive and/or unattractive to investors as their confidence in Saylor’s overall thesis weakens. This would potentially limit Saylor’s ability for further accumulation even if the price of Bitcoin would be considered by many “a bargain.”
The recent downturn illustrates these dynamics vividly. After Bitcoin surged to highs well above $100,000 in late 2025, it has fallen sharply in early 2026, falling to a low of $60,020.52 and at the time of publishing sits at $70,394.27
This means that purely on the value of the Bitcoin held by Strategy, Saylor currently is underwater to the tune of more than $4 Billion. While shocking, this is however much better than it has been this week. At the market lows, the position was underwater by $11.43 Billion.
The company’s stock has suffered accordingly, declining significantly from its peaks where it traded as high as $457.22 to a low of $102.50 as the premium evaporated and the market reassessed the risks of this leveraged bet.
Saylor remains defiant, continuing purchases even amid the pullback—most recently adding 855 Bitcoin for $75 million in late January to early February according to Bitcoin Magazine. Saylor views volatility as noise, insisting Bitcoin’s long-term trajectory remains upward and that he will be proven correct on his thesis.
|
Yet the episode revives echoes of his dot-com past: bold conviction meeting market reality, with shareholders bearing the brunt of drawdowns.
What does this mean for the broader experiment in corporate Bitcoin adoption? Strategy’s model has inspired imitators, but it also highlights the real world hazards of concentrating treasury strategy in a single volatile asset. If Bitcoin rebounds strongly, Saylor will be vindicated as a visionary who transformed a middling software firm into a crypto powerhouse.
If prolonged weakness persists, the structure could face strains—not from outright liquidation, but from eroded confidence, dilution fatigue, and questions about whether this is innovation or speculation dressed, ironically, as “Strategy.”
In an era when traditional finance increasingly intersects with digital assets, Saylor’s saga forces a reckoning: Can a public company responsibly treat Bitcoin as its core asset, or does the approach invite the same excesses that felled icons of past bubbles? The answer may not arrive for years, but the stakes—financial, philosophical, and systemic—are growing by the day.
The Capitalist is a reader-supported publication
Reject Corporate Left Wing Journalism
You're currently a free subscriber to The Capitalist. For the full experience, upgrade your subscription.
| ||||||||||
