U.Today - Peter Schiff, a financial commentator and well-known Bitcoin (BTC) critic, has stirred the broader cryptocurrency space with another bold statement on X. In a post, Schiff criticized the current investment strategy by market participants betting on the U.S. government investing in a Bitcoin Reserve.
Schiff paints looming crisis scenario
Schiff noted that a "crisis" would occur when the new administration came onboard and the government decided not to buy BTC. He explained that this realization could trigger panic among Bitcoin investors, particularly those who bought the coin with the anticipation of "front-running" their assets.The financial commentator argues that once the U.S. government fails to buy Bitcoin, these investors will engage in massive sales of their holdings. Such a scenario would result in the market being flooded with the coin and a corresponding price decline.
Schiff predicts that such an occurrence could compel MicroStrategy to accelerate its leveraged position in the asset. Michael Saylor, executive chairman of the business intelligence firm, has invested heavily in BTC using company funds, usually through leveraged trading. Therefore, he might continue to borrow to support large purchases to prevent a market and price crash.
However, Schiff predicts that the BTC price will only stabilize temporarily despite this strategy, as it is highly unsustainable. He warns that it could lead to a more massive crash in the long term, possibly starting with MicroStrategy’s stock (MSTR).
He insists that MSTR will crash first due to its heavy reliance on Bitcoin. Once that trigger is pulled, Bitcoin will naturally follow as the broader market reacts.
Schiff’s long-standing criticism of Bitcoin
Schiff has frequently attacked Bitcoin as a speculative bubble, criticizing institutional players like MicroStrategy for pumping BTC. He believes the "bubble" will burst soon, and the Michael Saylor-led firm will crash when there are no more willing buyers of its over-priced shares.As of this writing, the BTC price was exchanging hands at $95,715, representing a 5.55% decline in the last 24 hours. The asset had soared to a high of $101,455.86 in Tuesday’s trading session before being hit by market volatility.