TLDR
- Ripple CTO David Schwartz warns that MicroStrategy’s strategy depends heavily on Bitcoin’s price movements.
- Schwartz describes MicroStrategy’s position as a leveraged bet on Bitcoin, which amplifies both gains and losses.
- The company has accumulated 629,376 Bitcoin, with a total investment of $33.139 billion as of August 18, 2025.
- Schwartz predicts that MicroStrategy’s financial health could suffer if Bitcoin’s price experiences a significant decline.
- Michael Saylor, MicroStrategy’s chairman, emphasizes the company’s belief in Bitcoin’s long-term value despite market volatility.
Ripple CTO David Schwartz recently expressed concern over MicroStrategy’s strategy, claiming it heavily depends on Bitcoin’s price movements. Schwartz’s remarks came in the context of speculation surrounding MicroStrategy’s significant Bitcoin holdings and its financial stability. The company’s fate is increasingly tied to Bitcoin’s performance, especially given its leveraged position in the cryptocurrency market.
MicroStrategy’s Leverage and Bitcoin’s Impact
Schwartz pointed out that MicroStrategy’s overall strategy is essentially a “leveraged bet” on Bitcoin’s price. As Bitcoin’s value rises, MicroStrategy’s equity increases due to its use of leverage. However, this could backfire if Bitcoin’s price trends downward, negatively affecting the company’s balance sheet and financial outlook.
I don't think it's controversial that holding Microstrategy won't turn out well if Bitcoin trends downward and that it's generally like a leveraged long type position.
— David 'JoelKatz' Schwartz (@JoelKatz) August 18, 2025
“It’s not controversial to say that holding this strategy won’t turn out well if Bitcoin trends downward.”
He emphasized that the company’s financial health hinges directly on Bitcoin’s performance. With MicroStrategy’s leverage, any decline in Bitcoin’s price could lead to significant losses.
MicroStrategy’s Recent Bitcoin Acquisitions
MicroStrategy continues to accumulate Bitcoin aggressively. Between August 11 and August 17, the company purchased an additional 430 Bitcoin, valued at around $51.4 million. The company’s chairman, Michael Saylor, highlighted that its Bitcoin holdings have generated a 25.1% yield in 2025, further emphasizing the company’s reliance on Bitcoin’s market movements.
As of August 18, 2025, MicroStrategy holds 629,376 Bitcoin at a cost of $33.139 billion. This makes the company the largest corporate Bitcoin holder by a significant margin. MicroStrategy’s strategy reflects a strong belief in Bitcoin’s long-term value, though it also exposes the company to considerable market risk.
Ripple CTO Highlights MicroStrategy’s Bitcoin Vulnerability
Schwartz’s comments highlight the risk associated with MicroStrategy’s reliance on Bitcoin. He noted that the company’s stock behaves like a “leveraged long” position on Bitcoin, meaning that it gains more when Bitcoin’s value rises but suffers greater losses when it falls. The Ripple CTO’s statements serve as a reminder that companies like MicroStrategy are highly vulnerable to the volatile nature of cryptocurrency markets.
With Bitcoin’s price hovering around $114,846, Saylor hinted at further acquisitions, potentially expanding the company’s already massive position. However, the risks involved are clear, especially if Bitcoin’s price experiences a downturn.
