MicroStrategy (MSTR) Stock To Crash, Peter Schiff Says

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The stock of MicroStrategy (MSTR) is experiencing intense selling pressure due to a substantial drop in the value of Bitcoin. On Tuesday, the stock ended nearly 10% lower and has continued its downward trend in today’s pre-market trading. Notably, Peter Schiff, a well-known critic of Bitcoin and an economist, has cautioned about a possible price crash for MSTR in the near future as the selloff of Bitcoin continues to intensify.

Here’s Why Peter Schiff Predicts MicroStrategy (MSTR) Stock Crash

Prominent economist Peter Schiff, who is critical of Bitcoin, has sounded an alarm about a possible MicroStrategy (MSTR) stock collapse. This forecast follows intense pressure on MSTR, with its share price dropping by 10% on Tuesday and showing further declines during the pre-market trading hours today.

Currently, the economist suggests that the upcoming market crash might be due to the ongoing Bitcoin selloff. Additionally, he implied that the U.S. government is unlikely to buy Bitcoin, contrary to the claims made by Donald Trump during his election campaigns. It’s essential to mention that BTC experienced a significant surge following Trump’s victory, fueled by optimism about the U.S. establishing a strategic Bitcoin reserve.

Schiff’s Warning Sparks Concern

Peter Schiff stated that when it’s understood the U.S. government won’t be investing in Bitcoin, investors expecting profits from anticipating its purchase will offload their holdings. This action could prompt Michael Saylor of MicroStrategy to expedite the company’s borrowing for Bitcoin acquisitions, as a means to postpone an imminent market downturn, he indicated.

Significantly, MicroStrategy’s shares have closely mirrored Bitcoin’s performance, given that the company owns more than 1% of the leading cryptocurrency’s total supply. It is worth noting that a possible Bitcoin crash could lead to significant consequences for both MicroStrategy stock and the entire crypto market. Moreover, Peter Schiff suggested that a leveraged Bitcoin purchase would first cause a drop in MSTR stock before affecting Bitcoin itself.

MicroStrategy & Bitcoin Relation

Simultaneously, Schiff’s cautions are raised as MicroStrategy’s stock has seen a massive increase, climbing more than 1,000% since the company implemented its Bitcoin strategy in August 2020. It’s important to mention that the firm’s stock follows Bitcoin’s trends closely. Notably, the drop in MSTR price coincides with a sharp fall in Bitcoin’s value, which occurred during a broader crypto market collapse. In this article, we delve into why Bitcoin’s price dropped recently after reaching the $102K mark.

Critics such as Schiff argue that the company’s fast acquisition of Bitcoins could potentially trigger a crash, exacerbating any existing market slump. Moreover, it’s important to recall that Schiff has previously been critical of Bitcoin and firms adopting a Bitcoin purchasing approach.

MicroStrategy’s Bitcoin Buying Strategy

Lately, MicroStrategy has purchased 1,070 Bitcoins for a total of $101 million, catching investors’ interest. Interestingly, it was also disclosed by Michael Saylor that the company has amassed approximately 258,320 Bitcoins by 2024, valued at around $22.07 billion.

In addition, the founder of the company disclosed a plan to secure approximately $2 billion in funding by selling its perpetual preferred stock during the first quarter of 2025. This action is intended for the company’s Bitcoin acquisition strategy as well as bolstering its financial standing.

MSTR Stock Price Slips 10%

The Mastercard (MSTR) stock ended at $341.425 on Tuesday, marking a 9.94% decrease from its previous day’s closing. Interestingly, it also saw a minor dip of approximately 1% in the pre-market trading today. It’s worth noting that this stock has reached a new high for the past year at $543, reflecting increasing investor faith in the asset as the company persists with its Bitcoin acquisition approach. Additionally, a recent forecast suggests that the MSTR price could return to $500.

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2025-01-08 14:04