Samson Mow, the current CEO of company Jan3, unleashed widespread debate among the influential characters of the ecosystem, referring to the growing number of facilities due to Bitcoin (BTC), the fashion currently dominating the market.
“All Bitcoin finance companies led by executive directors who have never heard of and probably don’t understand what BTC is will quickly collapse if there is a significant price drop,” said an expert in the digital asset market.
Mow’s warning refers to companies that have built their business models around Bitcoin accumulation without actually understanding their assets or having a solid long-term strategy. teeth Because what they really want is to profit from rising BTC prices.. According to specialists, many of them are led by CEOs with no ecosystem experience, making them particularly vulnerable to significant market declines.
Given this ignorance, many of these companies choose to sell their holdings on a large scale, creating bearish pressure on the prices of digital currencies created by Nakamoto Atoshi, which could affect even those with long-term strategies.
Mike German, former president of Bitcoin Magazine, responded to Mow’s approach, saying, “There’s a huge difference between being a professional operator and being a visible opinion leader for Bitcoin, not a few of his most effective CEOs.”
Jameson Lopp, American software engineer and Cypherpunk only saylormoon”.
Thus, Lopp humorously humorously does not mean the current market cycle is a period of “UP only” called “UP only” (“UP only”).Saylormoon“This term combines”Moon CycleSee “(Cycle or “Until the Moon”) and “Saylor”, strategy CEO Michael Saylor. In other words, experts laugh at those who think there will be no price drop because “Saylor Cycle” only guarantees profits.
As reported by Cryptootics, the strategy is the company that launched this Bitcoinization of the Ministry of Corporate Finance. From 2020 to today Saylor has launched an aggressive BTC purchase modelfunded with the issuance of convertible bonds and actions without relying on operational income. Over the years, he made this strategy his main business and left his software solutions in the background. It is the company that is currently being quoted in the stock market with more balances.
The debate isn’t over, and Bitcoin researcher Bastian Sinclair said: “I have this name: an accelerated loop of institutional reflexivity. When a large institution buys, it justifies assets that attract more capital and raises prices.
This is because BTC supply is limited to 21 million units, and its broadcasts were cut every four years at an event known as half. Unlike money, BTC is not devalued by central bank issuance or monetary policy. So this is a medium-term, long-term bullish factor. If more companies want BTC, Fewer offers available and higher prices.
But beyond the optimism of some analysts, Mow is not the only one who warned about the risk that more and more companies are abandoning their major businesses to focus their strategy on Bitcoin alone. Economist Henrik Zeberg coincides with JAN3’s CEO and does not rule out BTC suffering from strong price drops that seriously affect the balances of these companies.
“Strategy can become insolvent or be forced to write off large scale. Actions can drop and creditors may face losses,” he warned.
It is worth clarifying that Zeberg defined the strategy as “a leveraged Bitcoin holding company passing through software companies.” Simply put, the accumulation of BTC is the company’s main business model. Therefore, if BTC collapses, he will have a strategy It can trigger a reliable crisis and create a domino effect across the market. In this respect, he emphasizes. “The market sense can have a serious impact when the high-profile names begin to crumble.”
In line with the same line, analyst Jacob King says that strategic strategies act as “a reflective ponge loop.” The loop begins when a company issues an action or debt to buy Bitcoin that promotes the price of BTC, raises the value of its own stock and attracts new investors. Then repeat the cycle with the new emissions as seen in the next image.
for, This model is completely dependent on the price of Bitcoin. If that impulse is broken at one point, the entire scheme could collapse.
Note that not all companies are ready to face Bitcoin volatility, as both Mow, King and Zeberg warn about the institutional heat caused by BTC.
Mow’s reflection serves as a call for attention in a cycle governed by institutional FOMOs. Not only is it a sure thing and long-term vision, but it’s a profitable business model and can be maintained over time. If BTC prices fall and the company is not prepared, the risk of collapse and “domino effect” is no longer possible and becomes a specific threat.