Long-time Bitcoin critic Peter Schiff criticizes MicroStrategy founder Michael Saylor over the company’s decision to buy BTC on leverage.
Earlier this week, MicroStrategy announced its latest Bitcoin purchase. The company acquired 9,245 BTC for $623 million, using proceeds from the issuance of convertible notes and its cash reserves. The purchase means that the company now holds more than 1% of Bitcoin’s total supply, a feat widely celebrated by the crypto community.
Nonetheless, long-time Bitcoin critic Peter Schiff was not impressed, seizing the occasion to criticize the MicroStrategy Chairman. Precisely, Schiff described MicroStrategy’s latest purchase as a continuation of “reckless leveraged buying” by its Bitcoin-focused founder.
In the most recent months, MicroStrategy has doubled down on Bitcoin, using a credit facility unique to public companies to raise funds. MicroStrategy typically issues convertible notes, an equity financing method that allows companies to use their stock to raise capital.
Speaking on this strategy, Schiff, a well-known gold bug, has foretold doom for MicroStrategy, warning that the company would incur severe losses when the price of Bitcoin drops.
According to him, when Bitcoin hits $20,000, MicroStrategy will lose $3.25 billion on its investment and will fall further behind at $5.5 billion if Bitcoin drops to $10,000. He added that Bitcoin’s price has already declined from its recent highs despite Saylor’s purchases and that its price will drop further now that MicroStrategy is no longer bidding.
Yet despite your reckless leveraged buying, Bitcoin is still down 15% from its high price just five days ago. Now that you're done buying the bottom can really drop out of the market. When Bitcoin hits 20K MSTR will be down $3.25 billion. At 10K MSTR will be down $5.5 billion.
— Peter Schiff (@PeterSchiff) March 19, 2024
Bitcoin Prints a Reversal
Similar to some of his negative comments about Bitcoin throughout the years, Peter Schiff’s latest comment has preceded a BTC reversal. The cryptocurrency has gained more than 6% since Schiff’s latest tweet and trades at $67,250 at the time of writing.
Meanwhile, this is not the first time Schiff has publicly attacked Michael Saylor on his Bitcoin position with MicroStrategy. Back in December 2022, he claimed that the then-CEO’s madness would drive the company out of business.
The prediction, however, has failed to materialize. Instead, MicroStrategy’s unrealized BTC profit has only grown significantly. The company currently sits on $6.8 billion of potential profits, with the price of BTC now more than 90% higher than its average purchase price of $35,160 per bitcoin.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
