Economist and Bitcoin critic Peter Schiff is back with a long-running feud with Michael Saylor’s Strategy. He slammed the Bitcoin-only company’s business model as “fraud,” adding that Strategy (MSTR) “will eventually go bankrupt.”
The gold investor on Sunday challenged Michael Saylor to a public debate on this proposition during Binance Blockchain Week in Dubai in December.
“MSTR’s entire business model is a fraud,” Peter Schiff publicly criticized the firm. “Regardless of what happens to Bitcoin, I believe MSTR will eventually go bankrupt.”
In June, he argued that Strategy’s marathon Bitcoin buying spree will look reckless once the next major downturn takes hold. He claimed the coin’s price “won’t stand up over time” and MSTR will fall with it.
Besides, Peter Schiff recently invited Binance founder Changpeng Zhao to a debate on tokenized gold vs Bitcoin – “which best satisfies the conditions of money.” Zhao, often referred to as ‘CZ,’ replied to him, saying he is “in the mood for it.”
Peter Schiff Explains Why Strategy’s Business Model Would Fail
“MSTR’s business model relies on income-oriented funds buying its ‘high-yield’ preferred shares,” Schiff wrote in a separate post on X.
According to him, these yields will “never actually be paid.” Schiff continued that the company will no longer be able to issue more debt, causing a “death spiral.”
“Dividends are only paid if MSTR decides to declare a dividend. But there is no requirement for MSTR to ever declare one, and there is no penalty for not doing so. Undeclared dividends don’t accumulate. They are lost forever,” he argued.
Peter Schiff has been a persistent Bitcoin skeptic, claiming the crypto’s 21 million supply cap as a “meaningless” metric. He has also compared Bitcoin to silver, advising investors to sell their BTC portions to purchase silver. However, Bitcoin ultimately outperformed silver in early July, rising to $111,999, and further surging to $124,457 in mid-August.
MSTR Stock Risks Crashing as BTC Slumps Further
Strategy’s (MSTR) stock has fallen by over 19% in the past 5 days, and nearly 30% over the past month, per Google Finance data.
According to experts, the dip in MSTR stock could be attributed to the recent underwhelming performance of the Bitcoin price. Additionally, Strategy’s wallet moving massive BTC holdings to Coinbase has further weighed on the market sentiment.
Bitcoin has further slumped on Monday, as part of a broader 10% weekly decline. The largest crypto by market cap failed to hold the $95,500 pivot, dropping to $92,890 on 17 Nov, a critical support breach.
Bitcoin has currently rebounded and is trading at $95,384 at press time, according to CoinMarketCap data.
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