• Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management, said gold remains more practical for everyday transactions than Bitcoin, renewing the debate over the cryptocurrency’s real-world usefulness.
• Gerber also criticized Michael Saylor’s Strategy Inc. (NASDAQ: MSTR), warning that its leveraged Bitcoin accumulation strategy could spark a major selloff if the company is forced to unwind its holdings. His remarks were included in a note shared with Benzinga.
• Gerber’s argument centers on gold’s widespread physical acceptance. He said the precious metal can be exchanged in more places around the world than Bitcoin, despite the crypto industry’s long-standing efforts to establish BTC as a payment option.
• Trader Scott Melker challenged that assessment, noting that Visa and Mastercard cards linked to crypto accounts allow Bitcoin holders to spend their assets at virtually any merchant that accepts card payments.
• However, those transactions typically involve a payment provider converting Bitcoin into fiat at the point of sale. As a result, merchants generally do not receive BTC directly through an onchain transaction.
• Gerber’s more serious concern involves Strategy’s approach of selling equity to finance additional Bitcoin purchases. He questioned the value for shareholders when Strategy trades at a premium to the Bitcoin it holds, with the company’s stock valued at roughly 1.61 times its BTC holdings.
• He argued that selling shares at an inflated valuation to acquire Bitcoin creates an unfavorable arrangement for investors, effectively requiring them to pay $200 for exposure to $100 worth of Bitcoin.
• Gerber also warned that a severe Bitcoin correction could put pressure on Strategy’s leveraged structure and potentially force the company to sell BTC. Such selling, he argued, could amplify losses across the wider Bitcoin market.
• Strategy has maintained that its increasing use of perpetual preferred stock, which has no fixed maturity date, reduces the risk of forced liquidation even if Bitcoin falls by as much as 80%.
• The company reported holding 629,376 BTC worth more than $72 billion in its latest disclosure after acquiring another 430 BTC for about $51.4 million. However, Strategy’s stock has lagged Bitcoin’s price performance over the same period.

Bitcoin miners shift toward AI

• Gerber also questioned the long-term strength of Bitcoin’s mining infrastructure as major miners increasingly redirect resources toward artificial intelligence and high-performance computing.
• The transition is already underway, with several publicly traded mining companies converting mining facilities into AI data centers and signing hosting agreements. Riot Platforms’ recent AI leasing deal is one example of the trend.
• Core Scientific is also converting a 300-megawatt Texas facility that previously housed Bitcoin mining operations into an AI-focused data center campus. Its colocation business has already surpassed its self-mining operations in revenue.
• CoinShares projections cited in industry reports suggest that among miners with significant AI contracts, Bitcoin mining could fall from about 85% of total revenue in early 2025 to below 20% by the end of 2026.
• The move toward AI does not mean Bitcoin mining is disappearing. Instead, it reflects the stronger economics of AI infrastructure compared with traditional mining. While the trend lends some support to Gerber’s concerns, it does not establish that the migration of mining capacity to AI will permanently limit Bitcoin’s future growth.