Keynote
Schiff warns that if you sell Bitcoin to buy back shares, both Bitcoin and MSTR stocks could crash. Strategy stocks have plummeted 48% since November 2024, when they wiped out $70 billion, and stocks are testing a simple 200-day moving average amid a falling triangle collapse.
Popular economist Peter Schiff has expressed concern that Michael Saylor’s strategy, formerly known as micro-strategy, fell into bankruptcy. His concern comes as he witnessed a sharp revision after MSTR’s stock price fell 5.74% on Monday, followed by another 4.7% in pre-market trading on Tuesday. After a strong rally last year in 2024, stocks faced significant sales pressure, falling 6% since the start of the year.
Peter Schiff predicts troubles in the Bitcoin strategy
Economist and Bitcoin critic Peter Schiff focuses on strategy-based Bitcoin-centric strategies. He also predicted potential challenges for the company if MSTR stocks began trading at a discount on the value of Bitcoin Holdings.
In this scenario, Schiff predicted that Michael Saylor’s company could theoretically sell Bitcoin.
BTC
$84 819
24-hour volatility:
0.8%
Market Cap:
$1.68 t
Vol. 24H:
$9.65 b
We close the discount as we use our earnings to buy back stocks. However, he argues that such a move could cause a significant drop in Bitcoin prices.
“The discount will continue to expand until bankruptcy forces sales,” Schiff argued, pointing to the long-term risks associated with MicroStrategy’s heavily harnessed Bitcoin bets.
Schiff’s criticism was that the Strategy (MSTR) expanded its total Bitcoin holdings to 499,096 BTC, and expanded its new $19.9 billion investment the next day. The acquisition was funded through revenue from the $2 billion convertible note offering and had an additional $300 million option until February 27th.
MSTR stock at free fall
The Strategy (MSTR) has fallen sharply, with stock prices rising to 48% since reaching an all-time high on November 21st. The decline wipes out roughly $70 billion from the company’s market capitalization, signaling an increasing challenge for companies’ aggressive Bitcoin acquisition strategies.
Source: BarChart
Additionally, at the current price range, MSTR stocks have suffered a decline in triangle failure, showing bearish momentum, so market analysts are cautious. Prices are currently approaching the first test of the 200-day Simple Moving Average (SMA) since September. This critical level of support will probably serve as a key indicator of the stock’s short-term trajectory amid wider market pressure.
Source: TrendSpider
Apart from the strategy, several corporate players have begun employing playbooks that put Michael Saylor’s BTC on their balance sheets. Companies including Metaplanet, Semler Scientific and others have joined the bandwagon over the past year. This gave us a strong valuation of each stock price.
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Disclaimer: Coinspeaker is committed to providing fair and transparent reporting. This article is intended to provide accurate and timely information, but should not be considered financial or investment advice. Market conditions can change quickly, so we recommend that you review your information yourself and consult with an expert before making a decision based on this content.
Bhushan is a fintech enthusiast and has a good talent for understanding financial markets. His interest in economy and finance has attracted attention to new emerging blockchain technologies and cryptocurrency markets. He is constantly involved in the learning process and continues to motivate him by sharing the knowledge he has acquired. In his free time, he reads thriller fiction novels and sometimes explores his culinary skills.
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