Prominent economist and Bitcoin critic Peter Schiff has issued a sharp warning about a potential Bitcoin price crash. He believes such a downturn could severely impact corporate investors, especially MicroStrategy, the largest corporate holder of Bitcoin. Schiff’s comments follow Bitcoin’s recent 7% price drop within a single day, alongside MicroStrategy’s MSTR stock losing nearly 10% of its value.
In a recent tweet, Schiff claimed that speculation about the U.S. government potentially buying Bitcoin has driven some investors to enter the market. However, he argues that once it becomes clear the government has no intention of supporting Bitcoin, these investors might sell off their holdings.
Schiff warns this could trigger a wave of selling pressure, pushing Bitcoin’s price even lower.
Schiff’s criticism centers on Michael Saylor, the CEO of MicroStrategy and one of Bitcoin’s most prominent corporate backers. Saylor has borrowed heavily to amass a large Bitcoin position, betting on its long-term price growth.
Schiff suggests this strategy is risky; if Bitcoin’s price continues to fall, Saylor could be forced to make additional purchases to prevent a market crash. Schiff sees this as a temporary fix that could eventually lead to Saylor’s leveraged position collapsing.
MicroStrategy recently announced plans to raise $2 billion by issuing perpetual preferred stock in early 2025. The company intends to use these funds to buy more Bitcoin and strengthen its financial position. While this move highlights Saylor’s confidence in Bitcoin, Schiff argues that a significant price drop could leave MicroStrategy overextended, potentially forcing it to sell assets at a loss.
Bitcoin’s price has fallen below $95,000, marking a 7% decline in the past 24 hours and bringing its market cap to $1.88 trillion. The Relative Strength Index (RSI) is currently at 46.88, signaling that bears are in control of the daily price action.
MicroStrategy’s stock (MSTR) also took a hit, closing at $341—a nearly 10% drop from the previous session. Pre-market trading showed an additional 2.46% decline, reflecting investor uncertainty as market pressures mount.
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