Part 6/10:
MicroStrategy's bold gamble on Bitcoin isn't without critics. The company’s heavy reliance on Bitcoin's price growth has prompted some to label it a Ponzi scheme—expecting returns based solely on new investor money. However, opponents of this view argue that MicroStrategy operates with a legitimate revenue-generating software business, thus distinguishing itself from traditional Ponzi structures.
Several risks are associated with this strategy, including:
- Premium Problem: MicroStrategy's share price often trades at multiples of its Bitcoin holdings. Investors pay a premium, which can be risky if Bitcoin's price dips.