Michael Saylor Slams Proof of Reserves: ’A Flawed Solution Chasing a Nonexistent Problem’

MicroStrategy’s bitcoin maximalist CEO just threw cold water on crypto’s favorite audit trend—here’s why he thinks the industry is wasting its time.

The ’Trust, but Verify’ Fallacy

Saylor argues proof of reserves audits are theater—like demanding a bank’s vault inventory while ignoring its off-balance-sheet derivatives. Crypto’s real crisis? Not missing reserves, but missing use cases.

When Transparency Backfires

Frequent audits could trigger bank-run psychology, he warns. After all, nobody demanded quarterly gold bar counts until the ETFs showed up.

The Cynical Take

Of course, this from a guy whose company avoids audits by simply never selling its 200K BTC stack—Wall Street’s version of ’if I ignore my margin calls, they don’t exist.’

Mixed reactions on Saylor’s stance

However, most of the X crypto community didn’t agree with him. Whale Panda called Saylor’s stance a ‘major red flag.’

“Talking about a major red flag. He compares it to publishing bank accounts and phone numbers…The whole point of Bitcoin is its transparency.”

Another market watcher, Pledditor, echoed Whale Panda’s sentiment and added, 

“PoR may compromise your privacy (and there is a valid list of criticisms about that), but it overall does NOT compromise the security of your coins. Saylor either has something to hide, or he’s completely ignorant about how Bitcoin works.” 

The proof of reserve concept gained momentum after the FTX implosion in 2022 amid gross misappropriation of customer funds.

In response, the industry key leaders, especially exchanges like Kraken, began publishing their PoR to ensure transparency. 

At the same time, revealing wallet addresses with funds may attract threat actors. In essence, the above discussion isn’t about whether Saylor or his critics are right or wrong, but a careful balance between transparency and security. 

That said, Strategy now owns 580,250 BTC or 2.7% of the total supply, worth about $63.46 billion at current prices. 

The cost of acquisition is reported to be $40B, meaning the firm is sitting on over $22 billion in unrealized profit. However, Arkham has only managed to track $35B BTC of its holdings.  

Meanwhile, Saylor has publicly stated that he won’t sell the BTC holdings and will always buy the top. But any sell-off by Strategy, breach, bankruptcy, or any other negative update may drag BTC and the overall crypto market.  

This is particularly the risk concern that the crypto community has raised in the past, given the firm’s growing influence in BTC supply. 

Strategy’s stock, MSTR, closed 26th of May’s trading session at $269, marking a 7.5% loss. MSTR’s performance followed BTC’s price fluctuation above $106K.