Prominent economist and Bitcoin critic Peter Schiff recently warned of a potential price crash for Bitcoin, which will lead to the loss of corporate investors mainly MicroStrategy. His remarks come at a time when Bitcoin’s price experienced a sharp drop of nearly 7% in just one day. Additionally, MicroStrategy, the largest corporate holder of Bitcoin, saw its MSTR stock price plunge by almost 10%.
Peter Schiff Warns of Potential Crash
In a recent tweet post Schiff points out that once it becomes clear the U.S. government will not be purchasing Bitcoin, many investors who bought in anticipation of such a move may decide to sell. He suggests that this could trigger a wave of selling pressure, potentially driving Bitcoin’s price down.
A key figure in this scenario is Michael Saylor, the CEO of MicroStrategy, who has been one of Bitcoin’s most vocal corporate supporters. Saylor has used leverage to build a massive Bitcoin position, betting that the cryptocurrency’s price will continue to rise.
According to Schiff, Saylor may be forced to accelerate his Bitcoin purchases in a desperate attempt to stave off a market crash, which would only delay the inevitable collapse of his leveraged position.
Saylor’s Strategy To Backfire
Schiff’s warning centers on the idea that Saylor’s strategy of buying Bitcoin with borrowed money could eventually backfire, leading to what he sees as a collapse in both Bitcoin’s price and MicroStrategy’s stock value.
Recently, saylor announced its plan to raise $2 billion by offering perpetual preferred stock in the first quarter of 2025. This move is part of the company’s strategy to buy more Bitcoin and strengthen its financial position.
This scenario could worsen if the Bitcoin price drops sharply, leaving Saylor unable to cover his position and forcing him to liquidate assets at a loss.
Bitcoin & MSTR Price Plunge
As of now, Bitcoin’s price fell below $95K, reflecting a nearly 7% drop over the past 24 hours, bringing its market cap to $1.88 trillion. The Relative Strength Index (RSI) is currently at 46.88, indicating that bears are in control of Bitcoin’s price action on the daily chart.
Meanwhile, MicroStrategy’s stock (MSTR) closed at $341, down by almost 10% from the previous session. The stock also saw a slight dip of about 2.46% in pre-market trading today.
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