Peter Schiff, a financial analyst and vocal Bitcoin skeptic, recently caused a commotion within the wider cryptocurrency community with another assertive claim concerning X. In a social media post, Schiff expressed his disapproval towards the investment approach being adopted by market participants who are wagering on the U.S. government establishing a Bitcoin Reserve.
Schiff paints looming crisis scenario
Schiff stated that a critical situation might arise once the new administration takes over, if they choose not to invest in Bitcoin. This revelation could cause fear among Bitcoin holders, especially those who had purchased the cryptocurrency in expectation of profiting from it before others (referred to as “front-running” their assets).
When it’s clear that the U.S. government isn’t going to purchase Bitcoin, investors who bought in anticipation of that purchase will likely start selling. Michael Saylor, on the other hand, might need to intensify his Bitcoin purchases using leverage to avoid a market crash. However, this action may only postpone the inevitable crash until MicroStrategy (MSTR) experiences one first.
— Peter Schiff (@PeterSchiff) January 8, 2025
The financial analyst contends that if the U.S. government chooses not to purchase Bitcoin, investors may decide to sell off their substantial holdings en masse. This mass selling could potentially overwhelm the market with the digital currency, leading to a drop in its value as a result of increased supply and reduced demand.
Schiff anticipates that this event could prompt MicroStrategy to hasten its debt-backed stance towards the asset. As the executive chairman of the data analytics firm, Michael Saylor has frequently used corporate funds to invest in Bitcoin, often through margin trading. Consequently, he may choose to take on more debt to sustain significant purchases and prevent a potential market collapse or price plunge.
Nevertheless, Schiff anticipates that the Bitcoin price will experience temporary stability but not for long, given its inherently unstable nature. He cautions that such a strategy could trigger a significant market downturn in the future, potentially initiating with MicroStrategy’s stocks (MSTR).
He maintains that Mastercard (MSTR) may experience a downturn first, primarily because of its significant dependence on Bitcoin. When this action occurs, it’s expected that Bitcoin will also decline in response, as the overall market adjusts to the situation.
Schiff’s long-standing criticism of Bitcoin
Schiff often criticizes Bitcoin, labeling it as a speculative bubble. He particularly targets companies like MicroStrategy for inflating Bitcoin’s value by buying large amounts. He predicts that the “bubble” is close to bursting and that Michael Saylor’s firm will experience a crash once there are no more buyers interested in their overpriced stocks.
Currently, each Bitcoin is being traded for approximately $95,715. This represents a decrease of about 5.55% over the past day. Earlier today, the value peaked at $101,455.86 during trading hours, but was later affected by market fluctuations.
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2025-01-08 18:07