Michael Saylor Faces Bitcoin Community Backlash for Supporting Bigger Banks

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As a seasoned crypto investor with a decade of experience under my belt, I find myself deeply conflicted about Michael Saylor’s recent statements regarding Bitcoin custody. Having seen the collapse of FTX and other centralized exchanges, I can’t help but appreciate his initial stance on self-custody. However, his recent shift towards trusting institutions has left me feeling a bit uneasy.

Michael Saylor, the chairperson of MicroStrategy, has lately encountered criticism from Bitcoin enthusiasts due to his endorsement of banks taking charge of Bitcoin management. This shift in opinion appears to be a deviation from his earlier advocacy for self-management.

During a discussion on October 21st, Saylor presented an opinion that sparked debate, implying that by moving their Bitcoins to institutions, Bitcoin holders would be left with nothing. Over the past four years, Saylor has been a strong advocate for Bitcoin. Yet, his latest remarks seem to contradict his earlier stance promoting individual control over cryptocurrencies (self-custody).

After the fall of FTX in November 2022, Saylor emphasized that bitcoin self-custody is crucial for maintaining the network’s integrity, as it prevents powerful custodians from compromising it. Essentially, he said, “If you can’t hold your own coins, there’s no way to build a truly decentralized network.

During the interview, financial markets journalist Madison Reidy queried Saylor if there was a possibility that the US government could take away Bitcoin owners’ self-custody rights. In response, Saylor labeled anyone who considers a state-enforced Bitcoin confiscation as plausible as a “crypto-anarchist with paranoia.” He further stated:

This idea is often repeated, but it’s not based on fact. It seems there’s a lot of unwarranted anxiety associated with it.

In his continued explanation, Saylor advocated for trusting “large, reliable banks specifically designed to safeguard financial resources” rather than depending solely on hardware wallets.

This incident served as a significant catalyst for Saylor’s critique throughout the crypto market. Sina, the founder of Bitcoin custody and security firm 21st Capital, expressed that “Saylor aims to confine Bitcoin to an investment token and impede its function as a currency”.

Michael Saylor, the leading voice and influencer on Bitcoin by a mile, says:

more conversational and easy-to-understand version of the given statement:

— Joel Valenzuela (@TheDesertLynx) October 21, 2024

Lately, prominent banking institutions such as BNY Mellon, have obtained permits for safeguarding cryptocurrencies.

Community Backlash against Michael Saylor

In simpler terms, Simon Dixon – a well-known advocate for Bitcoin – suggested that Michael Saylor is downplaying the significance of self-custody, which isn’t aligned with MicroStrategy’s future goals of transforming into a Bitcoin bank and providing collateralized loans. Moreover, Dixon emphasized that Bitcoin enthusiasts should continue to empower people by helping them break free from traditional banks, governments, and central banks.

John Carvalho, CEO of Bitcoin payments firm Synonym, criticized Saylor’s shift in stance, pointing out that Saylor once promoted the idea that “Bitcoin is hope” for everyone. He added:

I’m wondering, if we set aside ‘paranoid cryptocurrency activists’ and their typical arguments as individuals with hidden agendas, what does that imply?

On the contrary, it appears some individuals in the crypto community might be interpreting Saylor’s message too broadly or overextending it. Julian Figueroa, creator and presenter of “Get Based,” clarified that Saylor’s comments were primarily aimed at institutions rather than individual users in the community.

Large institutions, with over 200 employees, cannot function as anarchists; they require the services of Bitcoin banks for their investments, while small businesses and ordinary citizens can manage their assets independently through hardware wallets.

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2024-10-22 14:17