We will see more companies following similar strategies, says Parrish.
The analyst does not see convincing reason to invest in these companies.
“Saylorization” is reaching the directors of more companies. However, as this strategy expands, it also begins to mutate and get away from its original version: instead of accumulating Bitcoin (BTC) as a reserve asset, some companies are opting for Altcoins.
Before continuing, it is important to clarify that “saylorization” is a term to define Strategy’s strategy (formerly Microstrategy), the firm that leads Michael Saylor. From August 2020 to date, It has become an emblem of the institutional adoption of Bitcoinaccumulating 592,345 BTC as a reserve asset.
Currently, it is the public contribution company with more BTC in its treasury.
To finance BTC’s purchases, Saylor designed a Debt emission mechanism through convertible bonds and actions To, thus, obtain rapid cash without relying on your operational income.
However, “Saylorization” no longer replicates its original model and, in its most recent mutation, several companies changed BTC for Solana (Sol), Ethher (ETH) or XRP as reserve asset. For this reason, some analysts warn that, which was originally born as a strategy focused on the long -term value shelter, today it became a much more volative and speculative bet.
One of them is Joseph Parrish, a market analyst, who recommends being careful with Altcoins’ microstrategy ”and He thinks: “We are going to see many more companies forming ‘treasures’ of cryptocurrencies to create ‘crypto performance’, whether it produces real performance as a sun or not.”
When he mentions “crypto performance” refers to the possibility provided by network infrastructure such as Ethereum or Solana, that allow generating yields through Staking.
However, Parish points out that, although “this can be great on the positive and terrifying side in the other direction”, while explaining: “In the last five years, Sol has earned up to $ 250, it has collapsed to $ 10, it has risen again to 250 dollars and is now around 145 dollars.”
In the following tradingview graph, you can see the price movements mentioned by Parrish:
The contrast raised by Parrish highlights a key issue: BTC is perceived as a more stable and predictable asset in the long termwhile Sol still shows extreme volatility that can be risky for those who seek to build a value reserve.
In addition, there is another aspect to consider. In the case of Sol, although those who do staking receive an average performance of 8.3% annual, there is another important risk, because Solana has an inflationary model, that is, new currencies are issued every year. With an inflation of 5.3%, the real performance of the stand, discounting that inflation, is about 3%, provided that the demand grows enough to absorb the new offer.
To support the argument of the volatility that Parrish mentions, it is enough to see the following graph that compares the annualized volatility of BTC (white), sun (red) and the strategy actions (orange).
As can be seen, sun volatility was double that BTC in the last 18 months, with an average of 66% compared to 37% of the currency created by Satoshi Nakamoto. It also exceeds Strategy’s volatility (MSTR), which is 34.7%.
This metric highlights how risky a sun strategy can be implemented as a reserve asset. Its price presents sudden and uninfredent movements, unlike BTC that has proven to be the most solid long -term investmentsurpassing all cryptocurrencies.
Bitcoin, on the other hand, differs from the Altcoins because it represents absolute digital shortage. Not only has a supply limited to 21 million units, but also has a global consensus that values that limitation. In addition, being the first digital asset, he consolidated a solid base and a reputation that gives him his dominant position.
Finally, although Parrish does not rule out that “some of these companies may have a good performance,” he does not see a convincing reason to invest in them.
