Cardano, the proof-of-work (PoW) blockchain launched by Ethereum co-founder Charles Hoskinson, has been enjoying a strong rally in the past week which saw native ADA token add 25% to its now $17bln market capitalisation.
As the seventh-largest cryptocurrency, ADA’s utility works in much the same way as Ethereum’s Ether token, and has become a popular alternative among decentralised finance (DeFi) developers.
One outspoken figure who is not a huge fan, however, is devout Bitcoin maximalist Michael Saylor, CEO of business intelligence and software company MicroStrategy Incorporated.
Speaking with Altcoin Daily, Saylor made his opinion clear on how ADA (and other similar coins) should be treated by the regulators.
“If you study the history of Cardano, it’s pretty obvious it’s a security,” Saylor said, in turn calling ADA a “liability” and “very risky”, while alluding to ADA’s general lack of fundamental purpose.
Only Bitcoin, in Saylor’s view, counts as a commodity and should be treated as such.
His viewpoint, however contentious, has a degree of merit, when he contends that “to be a commodity network, there has to be no issuer, no ICO (initial coin offering, a crypto analog of an IPO), no central organisation”.
But Hoskinson snapped back at Saylor, saying: “Nobody controls (ADA). It’s completely decentralised, far more than Bitcoin. It has more use and utility. People buy the token not to speculate, which is the only thing they can do with Bitcoin. They buy the token to use it for stuff, medical records and whatever else they’re doing, because it has real-life utility.”
Hoskinson went further in his criticisms of Saylor: “It’s just one of those cases where (Saylor is) digging deep, fully digged in with Bitcoin, so it’s got to work, because if it doesn’t work the way he hopes, he goes bankrupt”.
Saylor the uber maximalist
Few come close to Saylor’s level of Bitcoin maximalism, a man who once told his followers to mortgage their homes to buy Bitcoin.
As CEO of Nasdaq-listed MicroStrategy, Saylor has stuffed company coffers with a total of 129,699 BTC following his most recent purchase on June 29.
He made his first purchase on August 11 2020, acquiring 21,454 BTC for US$11,652 a piece.
MicroStrategy’s BTC bag has consistently mounted — Source: MicroStrategy Earnings Report
In real terms, Saylor’s spending spree has amounted to US$3.98bln so far, making the realised average value on each Bitcoin US$30,664.
This may have sounded good on paper in the late-2021 bull run, but as it stands today, MicroStrategy’s total Bitcoin holdings are overpriced by US$890mln.
In other words: If Saylor were to cash out MicroStrategy’s BTC reserves today, he’d face nearly US$1bln in realised losses.
That is highly unlikely to happen, if his maximalism is to be taken at face value.
#Bitcoin is a swarm of cyber hornets serving the goddess of wisdom, feeding on the fire of truth, exponentially growing ever smarter, faster, and stronger behind a wall of encrypted energy.
— Michael Saylor⚡️ (@saylor) September 18, 2020
To Saylor, the bear market is just one more opportunity to buy Bitcoin at bargain levels.
As for MicroStrategy stock, things have also picked up recently.
After losing two-thirds of its value in the three months trailing June 30, MSTR saw a reversal which has so far added 34% back to pre-drop levels.
It seems like neither Hoskinson nor Saylor can claim victory in their back and forth for now.
