Maelstrom Fund CEO and former BitMEX CEO Arthur Hayes believes MicroStrategy’s long-term bitcoin acquisition strategy is a “flawed” practice.
In an interview with Benzinga, Arthur Hayes said that the tactic of monetizing bitcoin volatility through convertible debt and other fixed-income securities could put MicroStrategy in a difficult situation.
“The reason this tactic works is because the market value of the Bitcoins that MicroStrategy actively buys is volatile. However, if the flagship cryptocurrency starts to lose its volatility, there is a chance that MicroStrategy will face difficult times,” Hayes suggests.
He added that if Bitcoin volatility decreases, MicroStrategy will have a hard time servicing its debt obligations and raising funds, which will inevitably affect the value of its shares and capitalization level.
Hayes concluded by saying that his investment practice does not include investing in MicroStrategy debt securities, as there are “better ways to be long or short Bitcoin” in the market.
Earlier, Arthur Hayes said that the digital asset market could experience a “terrible collapse” on the day of the inauguration of US President-elect Donald Trump.