Peter Schiff is back on social media, criticizing Michael Saylor’s Bitcoin strategy again. This time, the infamous expert called it a “complete fraud” that he thinks will ultimately lead to bankruptcy. This followed the company’s announcement that it now holds an incredible 582,000 BTC, having purchased an extra $110 million worth of Bitcoin.
Strategy’s current Bitcoin stockpile is worth over $62.6 billion, with an average cost basis now just above $70,000 per BTC. So, the company has a 53.65% unrealized gain — for now, at least.
Schiff, who has always been a bit of a skeptic when it comes to Bitcoin, says the math does not lie: if the price of BTC dips below the company’s cost basis, losses could mount quickly. And with a big chunk of the Bitcoin stash being acquired through borrowed funds, a downward move could quickly turn into a “death spiral.”
Strategy’s Bitcoin bet a ticking time bomb?
It is not even Bitcoin’s price, according to Schiff. It is all about how the strategy itself is set up. With Strategy’s market cap currently at around $108.1 billion — and more than half of that tied directly to its Bitcoin holdings — a fall in BTC’s price or MSTR’s share price could put the company’s balance sheet under pressure.
If the collateral backing its debt weakens enough, the company could face forced liquidation — something Saylor has repeatedly pledged to avoid.
For Saylor, it is still Bitcoin “forever,” but the more he buys, the higher the cost basis and the narrower the margin for error. For Schiff, such a strategy only works in a never-ending bull market, and when applied to an asset as unpredictable as Bitcoin, this is a fundamental flaw.
Meanwhile, Saylor remains unbothered and confident in Bitcoin. But for critics like Schiff, the company’s conviction looks more like a leveraged gamble than a visionary play.
Read the full article here
