Ripple CTO Warns MicroStrategy’s Bitcoin Bet Could Backfire if Prices Plunge

Ripple's chief technology officer just dropped a bombshell prediction about MicroStrategy's massive Bitcoin gamble—and it's not pretty if crypto markets turn south.

The Warning Shot

MicroStrategy's entire corporate treasury strategy hinges on Bitcoin's continued appreciation. One wrong move—one major market correction—could unravel years of aggressive accumulation. The company essentially went all-in on digital gold while traditional finance skeptics watched from the sidelines.

High-Stakes Corporate Gambling

Unlike typical institutional investors who diversify, MicroStrategy bet the farm on BTC outperforming every other asset class. They leveraged debt, issued stock, and redirected cash flow—all to buy more Bitcoin. It's either visionary or corporate insanity, depending on which finance bro you ask.

Ripple's Reality Check

While Ripple deals with its own regulatory battles, its CTO clearly thinks MicroStrategy's strategy lacks downside protection. No hedges, no exit plan—just pure conviction that fiat currencies will implode and Bitcoin will reign supreme. Because nothing says 'responsible corporate governance' like betting shareholder value on volatile crypto markets.

Finance's cynical take? This isn't investing—it's a leveraged bet disguised as innovation, the kind of move that makes Wall Street veterans chuckle into their bourbon while checking their properly diversified portfolios.

Ripple’s Chief Technology Officer (CTO), David Schwartz, made a bold statement saying that MicroStrategy’s fate is heavily dependent on the price of Bitcoin. The comment came amid speculation and rumors about MSTR’s future and questions regarding its substantial BTC holdings.

Schwartz Comments on MicroStrategy’s Bitcoin Holdings

In a recent post on X (formerly Twitter), Schwartz suggested that BTC’s price directly impacts MSTR’s overall strategy because the company is essentially making a Leveraged bet on Bitcoin’s price movements.

According to MSTR chairman Michael Saylor, between August 11 and August 17, the company bought an additional 430 tokens worth around $51.4 million. Saylor noted that the company’s BTC position has generated a 25.1% yield so far in 2025.

Watching this acquisition closely, Schwartz wrote, “I don’t think it’s controversial that holding MicroStrategy won’t turn out well if Bitcoin trends downward and that it’s generally like a leveraged long type position.”

How Bitcoin Price Impacts MicroStrategy

When Bitcoin’s price rises, MSTR’s equity value increases because the company uses leverage (debt) to amplify gains. Conversely, if the price falls, this negatively affects the company’s value and financial health.

As of August 18, 2025, MicroStrategy owns 629,376 bitcoins with a total cost of $33.139 billion USD. Since the company holds this massive amount of BTC on its balance sheet, its performance is strongly influenced by price fluctuations. The company’s stock behaves like a leveraged long position on Bitcoin, meaning it tends to gain more than bitcoin when the price rises but also experiences greater losses when the price declines.

MSTR Expands Bitcoin Holdings

Since Trump’s election in November, MicroStrategy has more than doubled its holdings by acquiring approximately 376,726 Bitcoin in nine months. The firm remains the largest corporate Bitcoin holder, with its holdings constantly expanding.

MicroStrategy co-founder Michael Saylor has hinted at another Bitcoin acquisition, as BTC’s price hovers around $114,846. The company’s latest purchase was on Monday, adding 155 Bitcoin for $18 million. It now holds ten times more Bitcoin than the next largest corporate holder.

Saylor stated, “This investment reflects our belief that Bitcoin, as the world’s most popular cryptocurrency, is a dependable store of value and an attractive investment asset with more long-term appreciation potential than holding cash.”