Michael Saylor Hits Minefield with Bitcoin Statements – Nurse, Administer a Dose of OG Bitcoining

• Michael Saylor said Bitcoin HODLers shouldn't fear holding their Bitcoins under a bank's custody and indicated self-custody maximalism is a fear that's unnecessary.'
• He labeled Bitcoiners who fear government Bitcoin seizure asparanoid crypto-anarchists,' raising a lot of eyebrows.
• Saylor might be underestimating the risks of full bank custody with Bitcoin, as many in the community (us included) emphasized.

You know howMichael Saylor (MicroStrategy CEO) praised self-custody when FTX crashed in 2022?

We do. And so does everyone else.

He said self-custody is essential to preventing powerful, unchecked custodians from abusing your trust and mismanaging your funds.

But now, Saylor's gone rogue. Full 180-degree rogue. He suggested that Bitcoiners have nothing to lose by using too big to fail' banks over self-custody for their $BTC.

He also dismissed fears of state-sanctioned $BTC seizures as paranoid crypto-anarchism.' Did the crypto community grab the pitchforks? You bet they did, most of them, at least.

Let's see what prompted Saylor to make these statements.

What Did Saylor Say that Inflamed Crypto Bros?

Michael Saylor, the CEO of the largest corporate Bitcoin holder (252,220 $BTC), said some things in an interview with Madison Reidy on YouTube that riled up the crypto community.

He suggested two things:

1. There's no downside to trusting banks with your Bitcoins vs self-custody.
2. Many crypto users have a lot of fear that's unnecessary.'

The second point mostly referred toparanoid crypto-anarchists' who genuinely believe state-sanctioned Bitcoin seizures could become a thing.

But is that all he said? Of course not. The overarching context was a bit more nuanced, so here's the reasoning behind his claims:

• Self-custody has inherent risks, mainly tied to unregulated environments where asset theft or loss can occur.
• People's concerns over Bitcoin seizure are overstated when holding the coins in regulated institutions like JP Morgan or BlackRock.
• Law enforcement and lawmakers are deeply invested in regulated financial entities (like those above), so there's a minimal chance of asset seizure to occur.
• Unregulated institutions like FTX tend to be less reliable, riskier, and less secure than banks when holding $BTC long-term.
• Bitcoin's success heavily relies on widespread institutional adoption, which should potentially reduce its volatility and risk.
• Holding Bitcoin in large institutions doesn't make $BTC centralized. At its core, Bitcoin remains decentralized through its distributed blockchain.

In Saylor's view, the benefits of custodial Bitcoin safekeeping (aka banks) far outweigh the risks (such as relying on trusted intermediaries to remain honest).

But is that actually true?

Does Saylor Underestimate the Risks of Custodial Bitcoin Storage?

The community was fairly vocal about Saylor, with many criticizing his approach. Sina (founder of 21st Capital, a Bitcoin custody and security firm) was among his detractors.

Terrible look for Saylor to become a shill for the government & banking system and call true bitcoiners paranoid. Saylor is on a mission to relegate Bitcoin into an investment petrock and halt its usage as a currency. Spooky vibes.Sina, 21st Capital Founder

We believe therisks aren't as minimal' as he makes them seem. So, we summarized the community's counterpoints (and added our own) to Michael Saylor's arguments.

Bank Custody Counterpoint	Details
Centralized power	Centralized custody with large corporations concentrates power in the hands of a few. This potentially compromises Bitcoin's original vision of peer-to-peer decentralization and could lead to censorship or restrictions (especially when forced by governments).
Government control	The 1933 US gold seizure shows that governments can exert control over private assets. It's easy to see how, during economic crises, governments could pressure institutions to seize Bitcoins.
Increased surveillance	Keeping Bitcoins in banks leads to increased surveillance over your transactions. Banks will be able to track your usage patterns, making Bitcoin's pseudonymity impossible. Know-Your-customer regulations would also decrease user privacy.
Regulated institutions can fail	Regulated institutions aren't flawless. The 2008 financial crisis was a stark reminder, as trusted financial institutions either went bankrupt or needed government bailouts. Asset mismanagement or insolvency could significantly impact Bitcoin holders.
Bitcoin sovereignty falls	With custodian ownership, Bitcoin sovereignty (the ability to hold and control your $BTC without third-party involvement) becomes impossible.
Market manipulation	Market manipulation at the hands of large institutions is a distinct possibility. They could create artificial volatility and scarcity. Rehypothecation is another risk.
Not your keys, not your crypto	The not your keys, not your crypto' principle falls, as you trust the banks to control your keys and access your coins. An abuse of that trust is another distinct possibility.

In the end, the risks seem more than worth considering. During the interview,Saylor seemed to dismiss them and focused on the benefits of custodial Bitcoin ownership.

Simon Dixon (author of Bank to the Future' and OG Bitcoiner) speculated on Saylor's 180-degree shift from self-custody maximalist to bank lover.'

He said self-custody would go against MicroStrategy's long-term vision of becoming a Bitcoin bank to offer collateralized loans.

Verdict - Is Saylor Right or Wrong?

To us, Bitcoin's appeal lies in its decentralized, self-custodial nature. It's this vision that built blockchains and cryptocurrencies as we know (and love) them today.

Large institutions controlling Bitcoin just doesn't sound safe or privacy-friendly. But Michael Saylor might have a point in that institutional adoption is key to Bitcoin's success.

It's great that we have $ETH and $BTC ETFs, right?

References

• Sina's X Post About Saylor's Bitcoin Statements (X)
• Rehypothecation: Meaning and Examples (Investopedia)
• Symon Dixon's X Post About Sayor's Bitcoin Statements (X)

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