Economist Peter Schiff Makes Shocking Prediction: MicroStrategy Could Go Bankrupt Due to Bitcoin Leverage Strategy.
Is the "Bitcoin Leverage Strategy" Sustainable?
Schiff, a long-time Bitcoin skeptic and gold advocate, argues that MicroStrategy can only sustain its strategy as long as its stock remains highly valued.
Once the stock price drops, the entire domino effect could collapse.
"Saylor can keep buying Bitcoin because he sells stock at high prices and uses the proceeds to purchase more BTC. But if the stock price falls, this game is over," Schiff stated.
Will MicroStrategy Eventually Be Forced to Sell Bitcoin?
Schiff further warned that MicroStrategy cannot sell Bitcoin without triggering market panic.
"If MicroStrategy sells Bitcoin, the price will immediately collapse. Investors will notice and start dumping before everything crashes."
Additionally, Schiff emphasized that MicroStrategy's creditors do not want Bitcoin; they want cash.
However, MicroStrategy holds mostly BTC and lacks sufficient cash reserves to cover its debt. This could push the company into an unavoidable liquidity crisis.
Bitcoin at $88,000: A Sell Opportunity?
Schiff remains skeptical about Bitcoin's high valuation and urges investors to take profits early:
"If you sell Bitcoin at $88,000, that's a great price. Don't fall for the belief that BTC will reach $1 million, because when everyone believes that, it might never happen."
Instead of Bitcoin, Schiff recommends investing in gold and gold mining stocks, claiming they offer real opportunities.
Despite these warnings, MicroStrategy has just raised another $21 billion through a preferred stock offering to continue purchasing Bitcoin.
The company now holds nearly 500,000 BTC, worth approximately $42 billion.
Following this announcement, Bitcoin rebounded above $83,000 after dipping to $80,000 over the weekend. Meanwhile, MicroStrategy (MSTR) stock fell 5.5% in pre-market trading and has lost 50% of its value from its November peak.