Peter Schiff Criticizes MicroStrategy’s Bitcoin Strategy Amid BTC Price Crash

MicroStrategy’s stock price has dropped significantly in recent months, leading economist and gold advocate Peter Schiff to criticize the company’s Bitcoin-focused strategy. Peter Schiff argues that the firm’s financial position is worsening due to rising debt and the declining value of Bitcoin.

MicroStrategy’s Stock Decline and Bitcoin’s Price Drop

According to Peter Schiff X post, MicroStrategy which has recently rebranded as Strategy, has seen its stock price decline over 55% since its peak in November 2024. On March 10, the stock fell nearly 10% following a downturn in Bitcoin’s price, which dropped to around $77,800.

The decline came after the White House crypto summit, where President Donald Trump’s executive order on the Strategic Bitcoin Reserve did not include immediate government Bitcoin purchases.

Despite this decline, MicroStrategy remains the largest corporate holder of Bitcoin, owning 499,096 BTC at an average purchase price of $66,423 per Bitcoin. The total value of its Bitcoin holdings is estimated at around $41 billion. However, the company’s market performance has been closely tied to Bitcoin’s price fluctuations.

Bitcoin Whale Activity Signal Accumulation

Recent data from Santiment suggests that large Bitcoin holders, often called “whales” and “sharks,” have been influencing price movements. The analytics firm reported that wallets holding 10 or more BTC have accumulated nearly 5,000 BTC since March 3, despite a significant drop in prices over the past several weeks.

“Long liquidations have wiped out many leveraged traders, causing a major sell-off,” Santiment analysts noted. “However, whales have quietly started accumulating again, which could be a bullish sign if the trend continues.”

Bitcoin’s price has been under pressure due to a combination of market liquidations, regulatory developments, and macroeconomic concerns.

Peter Schiff’s Concerns Over Debt and Financial Stability

Peter Schiff has been vocal in his criticism of MicroStrategy’s reliance on Bitcoin, stating that the company’s growing debt is a major risk. He argues that if Bitcoin’s price does not rise significantly, the firm may struggle to repay its obligations.

“But the company now has way more debt per share. When the debt comes due, all that Bitcoin must be sold. Odds are the sale won’t raise enough cash to repay the debt. That means MSTR goes bankrupt,” Peter Schiff posted on X.

MicroStrategy recently announced a $21 billion At-The-Market (ATM) offering of Series A Perpetual Strike Preferred Stock. However, Peter Schiff has discredited this move saying,

“I don’t think you will be able to pull this off. Soon $MSTR will be trading at a discount to its Bitcoin holdings. That means selling these shares will produce a negative Bitcoin yield,” he added.

Supporters Defend MicroStrategy’s Bitcoin Strategy

Despite Peter Schiff’s warnings, many supporters of MicroStrategy’s Bitcoin strategy argue that the company has benefited significantly from its investment. Some users on X pointed out that the stock is still up massively over the past five years and that its price has increased by 85% in the last six months.

“The strategy is not working? MSTR is still up massive since starting this Bitcoin buying strategy,” one user commented in response to Schiff.

Another user compared MicroStrategy’s decline to Tesla’s recent stock performance, stating, “Tesla is down 50% too, clearly Tesla needs a new strategy. Time to fire Elon (based on idiot logic).” Schiff, however, dismissed this comparison, arguing that Tesla is not at risk of bankruptcy, whereas MicroStrategy is.