"The crazy Bitcoin bet by Strategy (and its many imitators)"

It all started with Michael Saylor. The CEO of Strategy (formerly MicroStrategy) is driving up the price of Bitcoin with huge purchases, thereby boosting the share price of the former software company. More and more imitators are entering the ring, including a well-known meme stock company. Ali Masarwah, fund analyst and CEO of financial services provider Envestor, warns of an endgame for the crazy Bitcoin casino.

16. June 2025. FRANKFURT (envestor): Under Saylor, MicroStrategy has become the world's largest Bitcoin holding company. The company is taking on billions in debt and issuing new shares to buy more and more Bitcoin – a model that has so far rewarded investors with enormous price gains. Strategy currently holds a good 553,550 Bitcoins. These are worth about $52 billion. However, the company's market capitalization is nearly $100 billion – almost twice the value of the Bitcoins it holds. Anyone who bought Strategy shares at $68.50 in early 2024 can look back on a gain of around 470 percent. No wonder more and more free riders are turning to crypto holdings.

The script: Euphoria in the crypto market enables new capital raises; the money flows directly into Bitcoin purchases, driving up the price and balance sheet value. As long as new investors keep coming in, the system works. In short, if Strategy's market value continues to exceed the value of its assets, many crypto fans are likely to bet that Strategy can continue to successfully drive up the price of Bitcoin with pumped money.

Strategy's “Bitcoin standard” is catching on: Former hotel operator Metaplanet from Japan, game developer Boyaa Interactive from Hong Kong, medical technology company Semler Scientific from California, and car loan provider Cango from Shanghai are all busy hoarding Bitcoins. Even GameStop (yes, GameStop!) has changed its strategy and purchased over $500 million worth of Bitcoin with a convertible bond. Most recently, crypto influencer Anthony Pompliano announced plans to raise $750 million with ProCapBTC. Incidentally, the company is a SPAC, a so-called “blank check” company. When the meme stock hype reached its peak in 2021, publicly traded companies with no business purpose were a hot trend. The prices of these vehicles collapsed in the wake of the 2022 correction; after a brief hype, they disappeared from investors' consciousness – until now. 

If something looks like wild speculation and smells like wild speculation, then it is most likely speculation.

The pyramid scheme works as long as new investors buy shares. Then Bitcoin can continue to be bought and the illusion of value creation is maintained. If the Bitcoin price collapses or interest wanes, however, there is a risk of a chain reaction – with dramatic consequences for the market. 

This brings us to two questions: When will the music stop playing? And, more importantly, will the consequences of a crash be limited to the crypto scene? Unfortunately, the fact that more and more crypto equity funds are being launched suggests a risk of contagion. These funds invest in the ever-growing number of Bitcoin hoarder stocks. In Europe, there are now 17 equity funds that include either the words “crypto” or “blockchain” in their names. They manage a not inconsiderable sum of 1.7 billion euros – and they are growing rapidly.

When will the crypto bubble burst? I don't know. The great tulip speculation of the 17th century lasted for decades until the bubble burst in February 1637. However, given the turbo-acceleration of modern technology, I wouldn't bet on us being at the beginning of crypto mania on credit. When in doubt, investors should stay away – and make sure their portfolios are as crypto-crash-proof as possible. Snowballs can turn into avalanches faster than you can say FTX.