Strategy Becoming a Major Risk for Bitcoin, says Market Strategist Mike Green

The biggest bull case for Bitcoin has always been its simplicity: Fixed supply, no central authority, and no leverage baked into the system. But what happens when Wall Street engineering starts creeping in anyway?

That’s the concern now being raised by investor Mike Green, who warns that one of Bitcoin’s most prominent corporate champions — Strategy Chairman Michael Saylor — may be introducing a structural risk that the asset was originally designed to avoid.

In a new interview with Coinage, the Simplify Asset Management Chief Strategist argues that the strategy behind Saylor's aggressive Bitcoin accumulation isn’t just bold — it’s fundamentally fragile.

“What he has done is he has introduced leverage into the Bitcoin world in a significant way,” Green says. “That ultimately creates demand for fiat currency that he really does not have access to unless markets choose to continue to facilitate and cooperate.”

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But so far, the market has been cooperating in a very big way. Strategy has been able to raise more than $8 billion dollars via its perpetual preferred stock STRC, which is advertising an 11.5% dividend. But as Strategy has used those proceeds to buy more Bitcoin, the cash reserve the company has held to ensure future dividend payments has dwindled to under two years at just about 18 months.

At the center of that concern is the financial engineering underpinning Saylor’s playbook. By issuing preferred shares and convertible debt — instruments that promise yield to investors — Strategy has effectively layered a traditional capital structure on top of a supposedly non-traditional asset. And that yield, Green argues, doesn’t come from nowhere.

“The cost of that preferred — people are attracted to it because it appears to offer an optically interesting yield,” he explains. “That yield ultimately can only be generated through two sources. Further appreciation of Bitcoin or additional issuance of equity.”

That dynamic, he says, mirrors a familiar — and dangerous — setup from traditional markets: the so-called “death spiral” convertible.

“This is no different than a traditional death spiral convert,” Green says, describing a structure where debt is backed by equity that can be diluted if prices fall. “In an event that proves adverse, you are forced to dilute yourself… and you typically have the inability to raise the cash to meet those obligations.”

In 2022, the crypto project Terra Luna suffered a death spiral after it was forced to sell its $3 billion in Bitcoin reserves.

The implication is stark. If Bitcoin continues rising, the model works — even thrives. But if price momentum stalls or reverses, the same mechanism that fueled demand could accelerate downside pressure, forcing equity issuance into a falling market.

That’s where Green sees the real risk — not just for Strategy shareholders, but for Bitcoin itself.

Because unlike prior cycles driven largely by spot demand, this iteration increasingly includes leverage layered on top. And that leverage, by definition, introduces fragility into a system that once prided itself on being anti-fragile.

“It’s created effectively a terminal point ... under which that system is inherently fragile and people will almost certainly be exposed to significant losses," Green said.

The warning echoes broader concerns about financialization creeping into crypto — from ETFs to structured products — as traditional capital markets integrate with digital assets. In isolation, Bitcoin remains a fixed-supply asset. But in practice, the ways investors access it are becoming anything but simple.

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