Avoiding Direct On-chain Verification of Bitcoin Reserves, Saylor Endorses Audits as Sufficient Measures
Strategy, a company that currently holds over 628,000 BTC, has expressed reservations about providing on-chain proof of reserves for its Bitcoin holdings. According to Michael Saylor, the executive chairman of Strategy, the company is still researching the idea and prioritizing security over immediate transparency.
The company's Bitcoin holdings have seen a significant increase since the start of the year, with an approximate 25% growth. The data for Strategy's Bitcoin holdings comes from Bitcoin Treasuries.
During the Q2 2025 earnings call, Saylor noted that while transparency through on-chain proof of reserves could boost investor confidence, the company wants to ensure that all security considerations are fully addressed before adopting such measures.
The idea of on-chain proof of reserves has been a topic of discussion in the Bitcoin community, with some analysts expressing skepticism about Strategy's lack of transparency regarding its Bitcoin holdings. However, Strategy's CFO, Andrew Kang, points to 27 years of internal controls and oversight by two major audit firms as sufficient assurance for investors.
The company's cautious approach to public disclosure methods was put to the test earlier this year when a "Satoshi-era" investor sold 80,000 BTC, a transaction facilitated by Galaxy Digital. The price of Bitcoin momentarily dropped from around $119,000 to nearly $115,000 during the sale, as reported in market coverage, but then rebounded to $118,000.
Michael Saylor argued that revealing the movement of large amounts of Bitcoin could potentially cause market disruptions. He referenced Galaxy Digital's recent facilitation of the sale as a warning, suggesting it caused a significant market disruption and sparked speculation.
Phong Le, president and CEO of Strategy, noted the irony of a Bitcoin-focused company resisting blockchain-based transparency. He emphasized that dedicating staff to proof of reserves would divert resources from product development. Instead, Strategy provides superior performance through intelligent leverage in addition to its Bitcoin holdings.
Despite the concerns about transparency, Strategy's Bitcoin holdings are currently worth more than $72 billion, making it one of the largest holders of Bitcoin. At current prices, each Bitcoin is worth over $118,000, a testament to the company's successful investment strategy.
As the Bitcoin market continues to evolve, it will be interesting to see how Strategy navigates the balance between security and transparency in managing its substantial Bitcoin treasury.
Technology plays a crucial role in Strategy's Bitcoin investing, as the company utilizes sophisticated financial tools and leverages for managing its Bitcoin holdings. However, when it comes to on-chain proof of reserves, Strategy prioritizes security over immediate transparency, citing potential market disruptions and resource allocation issues for product development.
