Renowned Bitcoin Critic Peter Schiff Issues Warning to Crypto Investors, Specifically Targeting MicroStrategy and Its CEO, Michael Saylor

Renowned economist and long-time Bitcoin critic Peter Schiff has once again issued a warning to cryptocurrency investors, specifically calling out MicroStrategy and its CEO, Michael Saylor

Renowned economist and long-time Bitcoin critic Peter Schiff has once again issued a warning to cryptocurrency investors, this time taking aim at MicroStrategy and its CEO, Michael Saylor.

In a recent post on X, formerly known as Twitter, Schiff focused his attention on MicroStrategy’s relentless pursuit of Bitcoin, an endeavor that has seen the company borrow funds to increase its cryptocurrency holdings. However, Schiff believes that Saylor’s strategy poses a massive risk not only to MicroStrategy’s shareholders but to the broader market as well.

“Don’t be fooled by the chart. $MSTR stock is down because $BTC is down. And BTC is down because the market is turning down. If the market goes down more, MSTR stock will go down more, and it will take BTC with it,” Schiff warned.

His comments come as Bitcoin faces another bout of volatility, having recently dipped by over 5% within 24 hours. With technical indicators suggesting that the cryptocurrency is in a bearish phase, further declines could occur if sellers maintain control.

Schiff has been a vocal critic of Bitcoin for years, consistently maintaining that the coin is a speculative asset with no intrinsic value. He has also expressed skepticism over cryptocurrencies in general, arguing that they are largely a vehicle for fraud.

In contrast, Saylor is a well-known Bitcoin bull who has been a strong advocate for institutional adoption of the cryptocurrency. Under Saylor’s leadership, MicroStrategy has become one of the biggest institutional Bitcoin holders, continuously buying more whenever the opportunity arises.

However, this strategy has also left MicroStrategy’s stock price vulnerable to Bitcoin’s market movements, as the two have become closely correlated. Recently, MicroStrategy’s shares tumbled nearly 10% following a sharp decline in Bitcoin’s price.

This correlation became a key focus for Schiff, who sees it as clear proof that MicroStrategy’s strategy is flawed and unsustainable. According to the economist, the software company’s stock price used to be based on the company’s performance and prospects. But now, with the company’s entire strategy revolving around Bitcoin, the stock is moving in tandem with the cryptocurrency.

“When Bitcoin goes down, MicroStrategy stock follows suit, and vice versa. This is a recipe for disaster, especially as we head into a market downturn,” said Schiff.

The economist went on to criticize MicroStrategy for using borrowed funds to buy Bitcoin, saying that this strategy is reckless and leaves the company highly exposed. He also noted that MicroStrategy is planning to sell convertible bonds to raise more funds, which he believes will further devalue the company’s stock.

“They are now planning to sell convertible bonds to raise even more money so they can buy more Bitcoin. But the more bonds they sell, the lower the stock price will go, and the more they will have to sell to make up for the stock price decline,” added Schiff.

Schiff’s warnings come at a time when MicroStrategy is facing increasing pressure from investors to return to its core business and begin generating profit. The company has been operating at a loss for several quarters now, and its stock price has plummeted by over 70% from its all-time high.

Meanwhile, many Bitcoin proponents, including Saylor, argue that short-term price swings are irrelevant in the long run. They believe that Bitcoin is still in the early stages of adoption and that it will ultimately become a mainstream store of value, similar to gold.

However, Schiff strongly disagrees, maintaining that Bitcoin lacks the fundamental characteristics needed to be a reliable long-term asset. He believes that Bitcoin is a pyramid scheme that will eventually collapse, leaving investors with huge losses.