- Peter Schiff warns MicroStrategy’s Bitcoin strategy risks bankruptcy amid price drop.
- MicroStrategy’s Bitcoin holdings are under pressure as BTC drops below $89,000.
- Strategy holds 499,096 BTC, with an average purchase price of $66,000 per Bitcoin.
Peter Schiff, targeting MSTR stock, a prominent economist and Bitcoin skeptic, posted on X on February 25, 2025, raising alarms about Strategy’s Bitcoin-driven financial strategy. Addressing Michael Saylor, Strategy’s leader, Schiff writes, “When $MSTR trades at a discount to its Bitcoin holdings, in theory @saylor could sell Bitcoin and buy back shares to close the discount.”
He warns that this action would crash both Bitcoin’s price and MSTR stock, a move Saylor would likely avoid. Schiff predicts that the mounting discount might cause the company to face bankruptcy.
The company currently holds 499,096 BTC approximately 2.37% of Bitcoin’s total supply, acquired at an average price of $66,000 per coin, following a $1.99 billion purchase funded by $2 billion convertible notes. With Bitcoin below $89,000, the gap between MSTR’s stock value and crypto stash grows.
Strategy (MSTR) Stock Encounters Rising Challenges
The current MSTR stock performance demonstrates difficulties that support Schiff’s outlook. According to TrendSpider the stock price has tested the 200-day Simple Moving Average since September. This is essential support during a descending triangle breakdown indicating bearish market trends.
Schiff predicted that a drop in MSTR stock price below the $433.43 conversion rate of its recent convertible notes financial instruments could force the firm into a difficult position.
The stock’s 6% year-to-date drop contrasts with its 2024 rally, underscoring the volatility Schiff critiques. Schiff argues that selling Bitcoin to prop up MSTR would backfire, crashing prices further. Meanwhile, Schiff notes gold’s 11% rise to $2,954, using this to question the company’s $33 billion Bitcoin bet—purchased at $66,400 per unit—as a shaky foundation in today’s market.
Schiff’s warning extends beyond Strategy, spotlighting a trend of companies like Metaplanet and Semler Scientific adding Bitcoin to their balance sheets. These firms saw stock gains in 2024, but MSTR’s leveraged approach sets it apart, amplifying Schiff’s critique.
Furthermore, Metaplanet’s recent BTC acquisition of 135 BTC increased its company holdings to 2,235 BTC. Recent stock price volatility does not diminish the 23.2% BTC yield, demonstrating the advantages of Bitcoin-focused operations. His post implies that a forced Bitcoin sale could ripple through the crypto market, affecting other corporate adopters.
