Tech billionaires Peter Thiel and Michael Saylor are establishing a cryptocurrency treasury, but some financial observers point out that their strategies may carry significant risks.
Thiel and Saylor have both invested substantial capital into cryptocurrencies through their respective companies and investment vehicles. Saylor frequently buys Bitcoin through his software company Strategy, while Thiel invests in cryptocurrency companies through venture capital and his exchange Bullish, which went public in early August.
They not only aim to expand their own holdings but also to influence the landscape and regulatory approach of the entire cryptocurrency industry. However, there are still significant differences in their specific strategies and outlooks on cryptocurrency, and companies that decide to establish cryptocurrency treasuries may trigger a "death spiral" during price crashes.
Michael Saylor is the co-founder and chairman of the software company Strategy (formerly known as Strategy), and he has garnered widespread attention in the financial world for his operations known as the "infinite financing loop."
The so-called "loop" refers to Strategy raising funds by issuing stock or equity-linked securities, then purchasing Bitcoin and accounting for these assets on the balance sheet.
Typically, issuing more equity would lower stock prices, but large Bitcoin purchases can drive up Bitcoin prices, thereby increasing Strategy's valuation and enabling it to issue more debt.
This operation creates a cyclical process of financing and investment.
This strategy has brought tremendous success to Strategy and attracted many companies to follow suit. The concept of "Bitcoin treasury companies" is becoming increasingly popular in the financial sector, with data from BitcoinTreasurys.net showing that 174 publicly traded companies currently hold Bitcoin.
Saylor's cryptocurrency strategy focuses on Bitcoin, aiming to accumulate as much of this crypto asset as possible and endowing it with almost metaphysical characteristics.
In 2020, he wrote that Bitcoin "is a swarm of network wasps serving the goddess of wisdom, drawing the fire of truth, and growing exponentially into a smarter, faster, stronger energy crypto barrier."
In a speech at the Bitcoin Policy Institute in March, Saylor referred to Bitcoin as a "Newtonian network," asserting that controlling this network is key for the U.S. to maintain global influence.
He further suggested that if the U.S. government adopted an aggressive Bitcoin accumulation strategy, it could eliminate national debt, and in other interviews, he stated that establishing a national Bitcoin reserve is "America's destiny."
While Thiel's strategy is not as groundbreaking as Saylor's, it is more diversified. In February 2025, Peter Thiel's venture capital firm Founders Fund, co-founded in 2005 and known for supporting companies like SpaceX, Palantir, and Facebook, invested $100 million in Bitcoin and another $100 million in Ethereum.
Founders Fund holds a 7.5% stake in ETHZilla, a biotechnology company that has transformed into an Ethereum investment tool, and a 9.1% stake in BitMine Immersion Technologies, with Founders Fund assisting it in raising $250 million in Ethereum.
Thiel has also invested in the cryptocurrency exchange Bullish, which went public on August 19 and completed a $1.15 billion valuation settlement using various stablecoins, including USDC and PayPal USD stablecoin.
He is clearly positioning himself in the cryptocurrency space and holds an optimistic view of the industry's prospects, but Thiel's perspective on Bitcoin is more cautious. Unlike Saylor's idea of "network wasps serving the goddess of wisdom," Thiel has questioned whether the asset has at least "partially become a financial weapon for China against the U.S."
In short, Thiel adopts a more cautious and diversified cryptocurrency investment strategy, while Saylor opts for an aggressive, Bitcoin-focused "all-in" model.
The cryptocurrency industry may soon witness which strategy proves more effective. Recently, the Bitcoin treasury model led by Saylor has gradually lost momentum.
Although the model is theoretically simple and straightforward—"raise funds, convert to Bitcoin, and wait for appreciation"—it also exposes companies to the risks of Bitcoin's market volatility.
If Bitcoin prices fall near the company's per-share Bitcoin value or net asset value (NAV), the stock will lose the valuation buffer that originally supported its price.
This could lead to a so-called "death spiral"—as the company's market value shrinks, financing channels also narrow. If no one buys the company's stock or provides loans, the company cannot expand its holdings or refinance existing debt. If loans mature or margin calls occur, it will be forced to liquidate assets.
Currently, Strategy's net asset value is about 1.4 times its stock price, whereas in February of this year, this ratio was nearly 2 times. According to Fortune, Carnegie Mellon University finance professor Bryan Routledge stated at that time, "There is no reasonable explanation for this discrepancy."
Therefore, Strategy investors face not only the risk of Bitcoin price volatility but also the "factors that lead to the discrepancy between net asset value and stock price… this discrepancy is also an additional source of risk."
In recent weeks, Strategy's stock price has declined in tandem with Bitcoin, but Saylor continues to buy Bitcoin. The company purchased 3,081 Bitcoins in the week ending August 24, spending $356.9 million.
The current market environment is relatively stable, and White House policies continue to firmly support cryptocurrencies. However, a crypto winter will eventually arrive, at which point the market will test which strategy can truly survive.
Related: Cathie Wood: Hyperliquid "reminds me of early Solana"
Original article: “Peter Thiel vs. Michael Saylor: Is the Crypto Treasury a Strategic Bet or a Bubble Trap?”
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