As an analyst with a background in both traditional finance and cryptocurrency, I find myself straddling two worlds – much like a coin flipped mid-air. While Michael Saylor’s perspective as a CEO of a publicly traded company is understandable, his dismissal of self-custody and the risks associated with institutional custody seems to overlook some key historical precedents and the core values of Bitcoin.
In a recent chat with journalist Madison Reidy, MicroStrategy’s CEO, Michael Saylor, sparked quite a stir within the Bitcoin community with his views on custody and governmental oversight. The conversation focused on potential dangers when large entities control substantial BTC amounts and the possibility of government takeover or seizure, echoing historical instances such as the gold confiscation mandated by Executive Order 6102 in 1933.
When questioned about the risks of having a significant amount of BTC held by third-party custodians and large institutions, Saylor dismissed concerns of increased seizure or confiscation. He argued that BTC is safer in the hands of regulated public entities like BlackRock, Fidelity, and JP Morgan than with unregulated private holders. Saylor suggested that when Bitcoin is held by “crypto anarchists” who operate outside of government regulations and tax systems, it poses a greater risk of government intervention.
As a researcher, I posit that the decentralized nature of Bitcoin, when primarily held by individuals or groups who reject regulation and do not recognize the authority of governments, taxation, or reporting requirements, could potentially escalate the risk of asset seizure.
He emphasized that regulated institutions provide stability and trustworthiness. “When you have regulated public entities like BlackRock, Fidelity, JP Morgan, and State Street Bank holding the asset, all the lawmakers and all the law enforcement arms are invested in those entities. There’s no way that all the senators and all the congressmen are going to seize the assets from Fidelity and BlackRock or Vanguard because that’s where all their retirement money is invested.”
As a researcher, I previously pointed out the historical instance of gold confiscation under Executive Order 6102 during the Great Depression as a potential parallel for future government seizures. However, Saylor discredited this comparison, branding it as a “myth and a trope” commonly peddled by fearful “crypto anarchists.” He argued that the situations are inherently distinct because, at that time, the U.S. operated on the gold standard, necessitating government control over gold to devalue the dollar.
Today, Saylor mentioned that neither the gold standard nor the Bitcoin standard is currently in effect. He explained that it’s unlikely for the U.S. government to seize Bitcoin held in custody any more than they would seize stocks or real estate because there’s no compelling reason for them to do so. Essentially, he suggested that owning Bitcoin held in custody isn’t any riskier when it comes to potential government seizure than holding stocks or real estate.
Bitcoin Community Backlash
Saylor’s comments were met with disapproval by many in the Bitcoin community, who emphasize decentralization and personal control as fundamental aspects. Jack Mallers, Strike’s CEO, countered on X: “Labeling self-custody as ‘crypto-anarchism’ oversimplifies Bitcoin’s achievements. It represents liberty—the liberty of expression, ownership rights, and the safeguarding of one’s property. We should not underestimate it because freedom isn’t guaranteed—it must be struggled for and safeguarded.
As a analyst, I wholeheartedly appreciate the insights of Saylor, yet I underscore the significance of varied perspectives in a thriving free market. In my viewpoint, my objective is merely to safeguard the fundamentals that I believe fortify Bitcoin’s strength: the principles of liberty and the flexibility for all individuals to interact with it according to their own discretion.
Sina Nader, one of the co-founders at 21st Capital, voiced his disapproval towards Saylor’s stance: “It’s rather unbecoming for Saylor to act as a spokesperson for the government and banking system while labeling dedicated Bitcoin users as paranoid. Saylor appears to be trying to redefine Bitcoin from a powerful currency into an investment trinket, essentially hindering its use as a means of exchange.
As a crypto investor, I’ve taken note of Samson Mow’s cautionary words: “Governments don’t necessarily need to seize your Bitcoin directly. They can simply immobilize your custodial Bitcoins in approved custodians indefinitely – what some call ‘Institutional Bitcoin.’ Even though a non-Bitcoin Standard government might not have a direct incentive to confiscate Bitcoin, they still have the motive to weaken and undermine Bitcoin.
Mow suggested that governments might seek to undermine Bitcoin because it represents a “harder and superior money” that could diminish the value of fiat currencies. He urged the community to “plan accordingly” with a self-custody solution and “expect [a] 6102,” referencing the historical executive order.
At press time, BTC traded at $67,707.
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2024-10-22 16:42