The current strategy consumes more than three and a half times Bitcoin’s (BTC) daily production which creates both positive and negative reactions throughout the cryptocurrency industry. The company has raised discussion about its BTC buying strategy because it continues to purchase large quantities of BTC which people question whether it constitutes actual Bitcoin or debt-backed assets.
The company bought 2,932 BTC for $264 million on January 26 which increased its total holdings to 712,647 BTC. The company has acquired almost four times the amount of BTC which has been mined throughout the world during the year 2026. The market should have reacted to this supply shock, according to logical reasoning. The price of BTC has stayed constant which has led people to doubt its value.
The market observed this uncommon price movement which brought up doubts about the complete on-chain backing of Strategy’s BTC holdings.
Also Read: Strategy Acquires 2,932 Bitcoin, Increasing Holdings to Over 712,000 BTC
Bitcoin Ownership Under Scrutiny
The dispute began when Jameson Lopp who co-founded Casa and worked as a cypherpunk raised doubts about the capability of Strategy to manage Bitcoin assets that have no financial restrictions. Lopp expressed his doubts about Strategy’s ability to prove that its Bitcoin assets remain under their control during his X post.
Rehypothecation occurs when custodians or brokers reuse client-owned assets to generate yield or collateral for other trades which leads to multiple paper claims existing on the same BTC asset. The original owner loses access to their funds when the custodian fails to operate because this situation creates multiple claims to the same BTC asset. The situation proved itself to be true when FTX and Celsius and BlockFi suffered their operational failures.
The term “real Bitcoin” in this situation refers to digital currency that exists in known blockchain addresses which do not allow third parties to make any claims. The concept of “rehypothecated Bitcoin” indicates that the same digital assets exist as collateral for multiple agreements because the system relies on trust instead of cryptographic verification.
Bitcoin, Saylor, and Proof-of-Reserves Debate
Michael Saylor quickly pushed back against the accusations which he faced. He stated that Strategy audits its custodians and explicitly rejects rehypothecation. The company maintains its BTC holdings through complete ownership which prevents any loaning and ensures outside parties can confirm their possession.
Lopp argued that Strategy depends on third-party custodians which include Fidelity and Coinbase Prime. This leads to doubt about Saylor’s ability to protect BTC from being lent out through hidden operations by these organizations.
The main conflict between the two parties centres around their need to provide proof of reserves. Critics require more transparent cryptographic proof to confirm that Strategy’s BTC assets are fully owned by the company and not represented as IOUs which resemble digital gold.
The ongoing debate about BTC demonstrates a fundamental asset principle which states people should not trust anything without conducting their own verification process.
Also Read: Strategy Buys 22,305 BTC After $2.13B Spend and Signals More Buying
