Peter Schiff claims Strategy is collapsing and Bitcoiners are complacent about it

Michael Saylor’s “buy and hold forever” BTC strategy, which seemed highly appealing, has become a concern as MSTR and BTC prices trade at yearly lows. 

Economist and longtime Bitcoin critic Peter Schiff said many “Bitcoiners are way too complacent” about the reality of the situation at play. 

Strategy’s stock MSTR dropped to $103 on Tuesday, marking a 23-month low and an 81% decline from its all-time high. The company’s preferred stock STRC is also down nearly 13%, “yielding” 13.2%.

The biggest Bitcoin owner is simply “collapsing,” Schiff claims. 

Saylor’s best option is to sell BTC

In a post on Wednesday, Schiff said Saylor will be pushed to a position where his best option would be to sell off some of the Strategy’s BTC holdings if MSTR’s price continues to decline.

Even at that, selling BTC may do little in raising the MSTR price at the current market conditions. 

“That would reduce the discount, but it may not raise the share price, as Bitcoin will crash,” Schiff wrote. 

The scenario Schiff describes hinges on a widening gap between MSTR’s market capitalization and the value of Bitcoin on its balance sheet.

Strategy currently holds 847,363 BTC valued at roughly $53 billion at current prices. MSTR, however, trades well below the per-share BTC value, a discount that has deepened as shares fell 20% over the past five trading days alone.

If MSTR shares continue to fall relative to Strategy’s Bitcoin holdings, the rational move for the company would be to sell BTC to fund share buybacks. Buying back the stock at a steep discount to net asset value would, in theory, narrow that gap and return value to shareholders.

However, the problem is circular, as Schiff frames it. Strategy holds so much BTC that a large sale could move the market. If Bitcoin’s price drops as a result, the company’s remaining holdings lose value too, potentially wiping out whatever benefit the buyback achieved.

“That’s the box Saylor put himself in,” Schiff argues. 

CryptoQuant CEO says Strategy should pause Bitcoin purchases

CryptoQuant CEO, Ki Young Ju, today said Strategy should consider pausing further BTC purchases, and instead focus on rebuilding its cash reserves and dividend coverage, Cryptopolitan reported early Wednesday. 

“Strategy’s BTC buying here looks more like a liquidity sink than a price catalyst,” said Young Ju. 

The CEO encourages Strategy to develop a disciplined selling framework for the next bull market to deleverage the company. 

Between May 26 and May 31, Strategy sold 32 BTC for the first time for $2.5 million. However, Saylor asserted it doesn’t change the company’s long-term strategy. 

This week, Strategy even sold $335.5M MSTR shares to purchase 520 BTC at the average price of $67,068.

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