Gerber's more pointed criticism targets Strategy's approach of selling equity to fund Bitcoin purchases. He questioned why an investor would accept diluted exposure at a premium to the underlying asset, a dynamic visible in Strategy's stock, which trades at roughly 1.61x its Bitcoin holdings.
"The fact they can sell stock at some inflated valuation to then buy Bitcoin is crazy bad math for the investor. Why would you buy $100 of Bitcoin for $200?"
Gerber said Bitcoin's periodic hard corrections could force Strategy into selling if its debt-funded structure comes under pressure, calling that scenario the mechanism that could "nuke" the cryptocurrency.
Strategy has countered that its shift toward perpetual preferred stock, which carries no maturity date, insulates the company from forced liquidations even in an 80% drawdown.
The company held 629,376 BTC worth more than $72Bn as of its latest disclosure, after adding 430 BTC for roughly $51.4M, yet its stock has lagged Bitcoin's own price performance over the same stretch.
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Bitcoin Miners Betting Big on AI
In other Bitcoin news, Gerber also questioned whether Bitcoin's network foundation is weakening as major miners redirect infrastructure toward artificial intelligence and high-performance computing.
That trend is documented rather than speculative: several listed miners have already converted mining capacity into AI hosting contracts, a shift detailed in coverage of Riot Platforms' recent AI leasing arrangement.
Core Scientific, for example, has been converting a 300-megawatt Texas facility, once used for Bitcoin mining, into an AI data center campus, with colocation revenue now outpacing its digital-asset self-mining revenue.
CoinShares projections cited in coverage of the trend suggest mining revenue could fall from roughly 85% of total revenue in early 2025 to under 20% by the end of 2026 for miners with significant AI contracts, according to crypto.news.
That reallocation of capital doesn't signal the disappearance of Bitcoin mining, but it does mean the economics increasingly favor AI hosting over pure hash-rate production, a tension that supports part of Gerber's broader skepticism without proving his claim that Bitcoin mining AI conversions have permanently capped the network's upside.
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Read original story Gerber Warns Strategy's Bitcoin Leverage Could Trigger a Selloff by Ahmed Barakat at Cryptonews.com
