Will Strategy become the first crypto domino to tumble?

During every Bitcoin bear market (the downward price trend that follows the end of a bull market), a major crypto company collapses. At the end of the 2017-2018 Bitcoin bull run, it was the numerous Japanese ICOs that had put themselves in the spotlight; at the end of the 2020-2021 bull run, it was FTX, the major crypto platform owned by Sam Bankman-Fried (who is now serving a prison sentence).

Judging by the number of negative articles in the business press this week, it increasingly seems likely that this time round it will be Michael Saylor’s Strategy.

SharpLink Gaming

Early this year, smaller publicly traded companies decided to copy Michael Saylor’s market model (you buy digital tokens so investors who don’t want to invest directly in crypto invest in your company instead). Firms that had nothing to do with Bitcoin or Ether transformed themselves into holders of digital tokens. Initially, this yielded incredible gains (for example, SharpLink Gaming Inc, a digital gaming company, soared 2600% when it announced it would buy Ether with its profits), but in recent months, their share price has followed the same path as Saylor’s Strategy.

Meanwhile, the business press (The Economist delivered the final blow this week) is attacking Saylor and seems to hope he will indeed become a victim of this bear market. If Bitcoin’s decline continues, the total weight of all Strategy shares will soon be worth less than the total stash of Bitcoins it has purchased, and things could move quickly from there.

To ward off the vultures, Saylor has only one advice: never sell a single Bitcoin. The problem is, he’ll likely have to make that choice soon.