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Bitcoin Crash Fuels Schiff’s Prediction That Saylor’s Strategy Won’t Survive
The recent downturn in the cryptocurrency market has brought to light a long-standing concern for Michael Saylor, CEO of MicroStrategy, as well as many other investors. Peter Schiff, a well-known crypto skeptic and gold bug, is now fueling speculation that Saylor’s strategy may not be sustainable.
Schiff points out that Strategy’s most recent convertible notes have a conversion price of $433.43. If the stock remains below this level, the company may be forced to sell Bitcoin just to pay its creditors. This would create a downward spiral, where selling pressure on Bitcoin leads to further declines in both the cryptocurrency and the company’s stock price.
In other words, if Strategy is not able to recover its stock price significantly, it may be left with no choice but to offload some of its massive Bitcoin holdings, which could lead to even lower prices and a vicious cycle. Schiff argues that this situation would be catastrophic for both Bitcoin and Strategy.
Furthermore, even if the company were to attempt to buy back shares by selling Bitcoin, Schiff believes this move would only accelerate the decline in the cryptocurrency’s value, widening the discount between its stock price and Bitcoin holdings, ultimately putting more pressure on Strategy’s financials.
Schiff concludes that it is a lose-lose situation for both parties involved. If Bitcoin does not see significant gains in the near future, Strategy may be forced to go bankrupt, while a Bitcoin crash could lead to catastrophic losses for investors who own the cryptocurrency and are waiting for a recovery.
Source: https://u.today/bitcoin-crash-fuels-schiffs-prediction-that-saylors-strategy-wont-survive
