Michael Saylor’s comment on regulated bitcoin custody draws criticism from Vitalik Buterin

Ethereum co-founder Vitalik Buterin added his voice to recent criticism over MicroStrategy founder and bitcoin evangelist Michael Saylor’s view that concern regarding the use of regulated entities for bitcoin custody was mostly from “paranoid crypto-anarchists.”

Saylor was recently interviewed by NZ Herald senior business journalist Madison Reidy, which he described as a conversation that debunked myths about Bitcoin, explained why it's the superior digital asset and store of value and advocated for its recognition as “digital money essential for human progress.”

However, a segment on regulated custody was picked up on by the Bitcoin community and heavily criticized, particularly among self-custody advocates, with some calling Saylor “not a real bitcoiner.”

“I'll happily say that I think Michael Saylor's comments are batshit insane,” Buterin posted to X on Wednesday. “He seems to be explicitly arguing for a regulatory capture approach to protecting crypto. There's plenty of precedent for how this strategy can fail, and for me it's not what crypto is about.”

Buterin was responding to Casa co-founder and CTO Jameson Lopp, who warned, “Bitcoin self custody isn't just about being a paranoid mountain man. There are many long-term negative ramifications to convincing people to trust third-party custodians.” Lopp argued that self-custody is crucial, not only for individual bitcoin holders, but also for maintaining decentralization, enhancing network security, preserving governance participation and promoting continued innovation and scaling without reliance on third parties.

Holding bitcoin through regulated entities

Saylor advocated holding bitcoin through regulated entities like BlackRock, Fidelity, JPMorgan and State Street. He argued that storing bitcoin in this way would be safer, dampen volatility and reduce the risk of loss, as governments and lawmakers have investments in these institutions and are unlikely to target them compared to unregulated, private entities, which might be more prone to government crackdowns. 

During the interview, Reidy referenced President Franklin D. Roosevelt’s Executive Order of 1933, which required U.S. citizens to turn in their gold coins, bullion and certificates to the government to prevent hoarding and stabilize the economy during the Great Depression, as an example of historical precedent.

Responding to concerns that holding bitcoin with such institutions might lead to increased centralization or vulnerability to government seizure, Saylor dismissed the views as primarily coming from "paranoid crypto anarchists." Roosevelt “didn't really seize the gold, people voluntarily turned in the gold,” Saylor said. He did not dismiss self-custody altogether but claimed that the fears stemming from regulated entities were exaggerated and that such entities provide more stability and security for bitcoin holders.

Earlier this month, Saylor told analysts at research firm Bernstein that MicroStrategy was eyeing a trillion-dollar valuation as part of its “bitcoin bank” endgame.

The Block reached out to Michael Saylor for comment.