BTC Bull Michael Saylor: Ethereum is ‘Clearly’ a Security

MicroStrategy CEO and Bitcoin (BTC) bull Michael Saylor said Ethereum (ETH) is “obviously” a security as he doubled down on labeling BTC as the only commodity in the crypto sector.

In an interview with Altcoin Daily, Saylor was questioned about his views on the classification of both BTC and ETH as commodities by US Senators such as Kirsten Gillibrand and Cynthia Lummis, along with figureheads from the Securities and Exchange Commission (SEC) and the Commodities Futures Trade Commission ( CFTC).

Saylor gave a long rundown of what he is, the fundamental differences between the Bitcoin and Ethereum networks, as he suggested that only the former has remained unchanged over the years:

“I think Ethereum is a security, I think it’s pretty obvious, […] it was issued by an ICO, there is a management team, there was a pre-mine, there is a hard fork, there are continuous hard forks, there is a difficulty bomb that keeps pushing back.

The CEO argued that the constant need for software upgrades on a network controlled by a team or entity is an indicator that ETH is a security. He pointed to the design of the long-delayed difficulty bomb, which he said will “kill” the entire ETH mining industry as examples of this.

According to Saylor, in order for a digital asset to be classified as a commodity, it must be backed by a “completely decentralized protocol where no one can change it, even if they want to change it.”

“For it to be a commodity, there can’t be an issuer, and the truth is you can’t really make decisions. I mean, one of the fundamental insights in the crypto industry is that the fact that you can change it makes it a security,” he said.

Securities are generally viewed as fungible and tradable financial instruments used to raise capital in public or private markets. Whereas commodities are seen as goods or assets with monetary utility. Assets like gold and silver are seen as hard commodities while soft commodities are commodities like rice or tea.

Saylor reiterated that BTC is a commodity as the core of the Bitcoin network cannot be changed, much like the physical makeup of gold:

“If you want to establish yourself as a digital commodity, you’re trying to create something like gold in cyberspace.”

However, despite Saylor’s arguments, the Bitcoin network has undergone multiple network upgrades over the years. The most notable in recent history was the November 2021 Taproot softfork, which aimed to improve Bitcoin’s scripting capabilities and privacy.

Asked about his thoughts on other altcoins, such as Cardano’s native token ADA, Saylor reiterated his maximalist sentiments, stating:

“I think all proof-of-stake networks are effects and they are all very risky […] it’s above my pay scale, the regulators will decide whether to allow them to go through or not, they won’t let them go through.”

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The MicroStrategy further noted that one of the main reasons it prefers BTC over all other crypto assets is that it is concerned that altcoins are non-compliant security tokens that could disappear.

Saylor’s MicroStrategy has continued to gain BTC despite the asset’s tank value in 2022, and as of June 29, the company had 129,699 BTC worth about $3.98 billion at the time.