Michael Saylor Advocates for Bitcoin Self-Custody Amid Community Backlash

Highlights:

• Saylor supports Bitcoin self-custody, calling it a fundamental right for all users.
• He faced backlash after suggesting holders use “too big to fail” banks instead.
• Critics argue that relying on major banks threatens Bitcoin’s decentralization and core principles.

MicroStrategy founder Michael Saylor expressed his support for Bitcoin self-custody, calling it a fundamental right. This statement comes after his bank custody proposal ignited outrage within the crypto community. 

Saylor said in a post on X on Oct. 23 that individuals and institutions have the freedom to decide how they manage their crypto assets. “Bitcoin benefits from all forms of investment by all types of entities, and should welcome everyone,” he added.

I support self-custody for those willing & able, the right to self-custody for all, and freedom to choose the form of custody & custodian for individuals & institutions globally. #Bitcoin benefits from all forms of investment by all types of entities, and should welcome everyone.

— Michael Saylor⚡️ (@saylor) October 23, 2024

Saylor’s Bank Custody Proposal Sparks Criticism, Buterin Calls It “Batshit Insane”

In a recent interview with financial reporter Madison Reidy, Saylor recommended Bitcoin holders store their assets with “too big to fail” banks rather than opting for self-custody. He argued that holders have nothing to lose by transferring their BTC to major financial institutions.

According to Saylor:

“I think that when the Bitcoin is held by a bunch of crypto-anarchists who aren’t regulated entities — who don’t acknowledge government or don’t acknowledge taxes or don’t acknowledge reporting requirements — that increases the risk of seizure.”

Saylor has faced criticism from the crypto community, including Ethereum co-founder Vitalik Buterin. He called Saylor’s comments “batshit insane.” Buterin believes that depending on large financial firms like BlackRock and Fidelity for Bitcoin custody is against the core principles of cryptocurrencies.

The Ethereum founder also pointed out that Saylor’s approach could lead to regulatory capture, allowing these institutions to control Bitcoin and threaten its decentralization.

I probably did more than most to spread the "mountain man" trope (btw I consider those remarks of mine outdated; snarks and AA changed the tradeoff space completely), and I'll happily say that I think @saylor's comments are batshit insane.

He seems to be explicitly arguing for a…

— vitalik.eth (@VitalikButerin) October 22, 2024

Crypto Figures Support for Self-Custody

VanEck adviser Gabor Gurbacs responded by saying this view shouldn’t be controversial. He described it as “just common sense.” On the other hand, Dash marketer Joel Valenzuela referred to it as “capitulation,” asserting that Saylor revealed his “true colors.”

Capitulation.

But he already showed his true colors. https://t.co/lvu8VLm8IB

— Joel Valenzuela (@TheDesertLynx) October 23, 2024

On Oct. 23, Max Keiser commented: 

“The recent comments attacking self-custody demonstrate a regressive tendency to favor the legacy, centralized banking crooks that Bitcoin fixes.” 

Jameson Lopp, co-founder of Casa, strongly supports Bitcoin self-custody. He argues that self-custody is essential for both individual holders and the continued growth of the entire network. Lopp also warns about the risks of concentrating large amounts of Bitcoin in the hands of a few major organizations.

Further, Erik Voorhees, founder of ShapeShift, criticized Saylor’s rejection of self-custody. He argued that it weakens a fundamental protection against centralization and corruption.

Saylor's getting trashed for the self-custody comment.

As he should.

Self-custody of the digital bearer asset is the entire point.

*The entire point*

All important attributes of Bitcoin emerge from this property.

This doesn't mean that all Bitcoin holders should… https://t.co/7VREcCfRxZ

— Erik Voorhees (@ErikVoorhees) October 22, 2024

MicroStrategy’s Ambition to Establish a Bitcoin Bank

Saylor, co-founder and executive chairman of MicroStrategy, has led the company’s major Bitcoin investments. Under his leadership, the company has amassed over 252,000 BTC, currently valued at approximately $17 billion. Building a Bitcoin portfolio is the first step in a long-term strategy. 

Saylor has introduced an ambitious plan to turn the company into a leading Bitcoin bank, with the goal of developing a full range of Bitcoin-based financial products. He believes this strategy will help the company dominate the market. Additionally, it could lead to a valuation of up to $1 trillion as Bitcoin’s value rises over time.