A well-known gold advocate denounced MicroStrategy's investment plan to buy more bitcoin and increase its cryptocurrency reserve.
Peter Schiff, a vocal critic of the first-born cryptocurrency, also criticized President-elect Donald Trump's pro-crypto stance, arguing that it is detrimental to the country.
MicroStrategy bitcoin Investment Strategy
MicroStrategy revealed that it has a $42 billion investment strategy to buy more <a target="_blank" href="https://www.coingecko.com/en/coins/bitcoin” target=”_blank” rel=”noopener nofollow”>bitcoin in the coming years.
Analysts said that the American development company is known for purchasing a large amount of cryptocurrencies regardless of market fluctuations.
Reports stated that <a target="_blank" href="https://sherwood.news/crypto/microstrategy-owns-more-bitcoin-than-the-us-government/” target=”_blank” rel=”noopener nofollow”>MicroStrategy recently purchased 55,500 btc worth $5.4 billion, allowing the company to strengthen its position in the cryptocurrency sector.
At press time, MicroStrategy holds 386,700 btc worth more than $36 billion, placing the company among the largest corporate cryptocurrency holders.
A dangerous bet
Schiff criticized MicroStrategy's continued purchase of the digital asset, denouncing the $42 billion investment plan to acquire more bitcoin in three years.
bitcoin critic described MicroStrategy's btc investment plan as “a dangerous gamble.”
<blockquote class="twitter-tweet”>
It's been four weeks since <a target="_blank" href="https://twitter.com/search?q=%24MSTR&src=ctag&ref_src=twsrc%5Etfw” rel=”nofollow noopener” target=”_blank”>$MSTR announced its three-year plan to spend $42 billion on the purchase <a target="_blank" href="https://twitter.com/hashtag/bitcoin?src=hash&ref_src=twsrc%5Etfw” rel=”nofollow noopener” target=”_blank”>#bitcoin. MSTR has already spent 10 billion dollars. At this rate, the three-year plan will be completed in about 16 weeks. Once the purchase is made, expect both bitcoin and MSTR to crash.
—Peter Schiff (@PeterSchiff) <a target="_blank" href="https://twitter.com/PeterSchiff/status/1861530779580264846?ref_src=twsrc%5Etfw” rel=”nofollow noopener” target=”_blank”>November 26, 2024
“At this rate, the three-year plan will be completed in about 16 weeks,” Schiff said.
He believes that the price increase caused by what is called MicroStrategy's “bold plan” will be short-term, causing a considerable drop in the price of btc and a drop in the company's price. <a target="_blank" href="https://www.entrepreneur.com/finance/microstrategys-bold-bitcoin-strategy-drives/483522″ target=”_blank” rel=”noopener nofollow”>stock price.
Furthermore, Schiff believes that the company's large-scale purchase only brings about artificial price appreciation, noting that it may pose a problem for the company because it put all its eggs in one basket, which is not a smart concept in no investment.
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btc market cap currently at $1.88 trillion. Chart: TradingView.com
Schiff predicts that MicroStrategy may not be able to fund future bitcoin purchases, echoing his view that this move could hurt both the company and its shareholders.
On the other hand, MicroStrategy executive Michael Saylor defended the company's investment approach and said they have no plans to sell their crypto assets in the near future.
Image: ETMarkets.com
Saylor said the company remains optimistic about the future of btc, and urged other companies to take inspiration from its investment strategy.
Historically, Schiff has been a staunch critic of MicroStrategy's moves to purchase bitcoin.
Trump's pro-cryptocurrency stance: harmful to the economy?
Schiff also criticized Trump on his plans for <a target="_blank" href="https://www.theguardian.com/us-news/2024/nov/27/trump-crypto-extremism” target=”_blank” rel=”noopener nofollow”>implement regulations who are in favor of cryptocurrency, arguing that it will weaken the country's economic position.
“When the government picks winners and losers, it usually picks the losers. “Thanks to the Trump administration choosing bitcoin, Wall Street is gaining big by allocating bad capital to btc and related value-destroying businesses,” Schiff said.
The staunch cryptocurrency critic believes that the United States would weaken once it became a bitcoin superpower.
Cryptocurrency advocates, meanwhile, dismissed Schiff's views, saying they are among the dumbest posts ever.
Featured image by FXLeaders, chart by TradingView
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