Bitcoin Prices Plummet... Peter Schiff Warns of 'Strategy' Bankruptcy Risk

# MicroStrategy’s Stock Plummets Amid Bitcoin Swoon, Peter Schiff Criticizes Bitcoin-Focused Strategy MicroStrategy's stock has plunged over 55% in recent months as Bitcoin prices dropped to $79,000, drawing sharp criticism from economist Peter Schiff regarding the company's Bitcoin-centric strategy. Schiff argues that the increase in the company's debt and the decline in Bitcoin’s value threaten its financial stability. # Stock Drop Following White House Crypto Summit Peter Schiff, in a post on X (formerly Twitter), highlighted that MicroStrategy’s stock (recently rebranded to “Strategy”) has dropped more than 55% since its peak in November 2024. Specifically, on March 10, Bitcoin's price fell to approximately $77,800, causing nearly a 10% plunge in the stock price. This decline followed a White House cryptocurrency summit, during which President Donald Trump announced an executive order on strategic Bitcoin reserves. However, the order did not include an immediate plan for government Bitcoin purchases. MicroStrategy, still the largest corporate Bitcoin holder with 499,096 BTC, has an average acquisition cost of $66,423. The total value of its Bitcoin holdings is estimated at around $41 trillion, but the company's market performance remains highly influenced by Bitcoin price volatility. # Accumulation Signal from Bitcoin Whales On March 11, CoinPepper quoted data from cryptocurrency analysis firm Santiment, which reported that large Bitcoin holders, termed 'whales' and 'sharks' holding 10 BTC or more, are impacting the market. According to Santiment, around 5,000 BTC have been accumulated in these large wallets since March 3. Santiment analysts noted, “Many leveraged traders have suffered losses due to the liquidation of long positions, but whales have quietly begun accumulating. If this trend continues, it could be a positive signal.” Bitcoin prices face pressure from market liquidations, regulatory changes, and macroeconomic concerns. # Peter Schiff on Debt and Financial Stability Concerns Peter Schiff points out that MicroStrategy’s reliance on Bitcoin poses significant risks due to its increasing debt. He warns that the company may struggle to repay its liabilities unless Bitcoin prices rise substantially. On X, he stated, “The company’s per-share debt has increased significantly. When the debt matures, they will have to sell all their Bitcoin. However, it's likely they won't generate enough cash from the sale. This spells bankruptcy for MSTR.” MicroStrategy recently announced the issuance of $21 billion in Series A perpetual preferred stock to raise capital. However, Schiff criticized this move, asserting, “This plan won’t succeed. Soon, MSTR will trade at a discount to its Bitcoin holdings, and the stock sale will result in negative Bitcoin returns.” # Support for MicroStrategy’s Bitcoin Strategy Despite Schiff’s warnings, supporters of MicroStrategy's Bitcoin strategy claim the company has reaped considerable profits from its investments. Some users on X pointed out that the stock has surged significantly over the past five years and has increased by 85% in the last six months. One user refuted, “Ineffective strategy? MSTR has surged significantly since it started its Bitcoin purchase strategy.” Another user, comparing Tesla's stock decline, remarked, “Tesla also dropped 50%. Should Tesla adopt a new strategy? Should we fire Elon Musk?” However, Schiff dismissed the comparisons to Tesla, asserting, “Tesla doesn’t face bankruptcy risks, but MicroStrategy does.”