Peter Schiff Reveals How Hedge Funds Bet On MSTR Can Crash Bitcoin

Highlights

Peter Schiff warns that hedge fund strategies involving Bitcoin and MicroStrategy could destabilize the market.
Despite increased buying from Bitcoin ETFs, the cryptocurrency’s price remains subdued, suggesting potential market manipulation.
Schiff speculates that hedge funds may use Bitcoin buys to facilitate short-selling of MicroStrategy shares.

As Bitcoin (BTC) struggles to maintain its momentum, with its price trading sideways for over three months, notable critic Peter Schiff has raised alarms about the potential market manipulation by hedge funds. According to Schiff, these financial giants may be engaging in trades that could affect Bitcoin’s stability and severely impact MicroStrategy’s financial standing.

Peter Schiff Raises Alarm on Bitcoin Stability

Peter Schiff points to an unsettling pattern where, despite the constant influx of buying from 11 spot Bitcoin ETFs, Bitcoin’s value remains suppressed, signaling a possible orchestrated sell-off. This scenario leads to questions about the sellers in the market, particularly if these ETF investors start to pull back. Schiff suggests that hedge funds might buy Bitcoin and related ETFs strategically, not for long-term holding but as a maneuver to short-sell shares of Microstrategy, a company known for its hefty investments in Bitcoin.

Hedge funds selling as they buy MSTR. They would be unwinding both sides of the spread.

— Peter Schiff (@PeterSchiff) June 17, 2024

This strategy could be setting the stage for a broader market shake-up. If hedge funds start to unwind their positions, they would initiate a cascade of sell orders for Bitcoin. This influx of sell orders would likely cause Bitcoin’s price to plummet. Such a decline would place additional pressure on Microstrategy’s stock, potentially leading to a downward spiral that could impact shareholders and the crypto market at large.

Bitcoin Price Braces for Impending Volatility Surge

Current technical analysis supports the notion of an impending significant price movement in Bitcoin price. The Bollinger Bands on Bitcoin’s 24-hour chart continue to tighten—a phenomenon typically indicative of upcoming volatility. Bitcoin’s price hovers near the lower Bollinger Band, suggesting that the asset might be undervalued.

Source: TradingView

Moreover, the Bull Bear Power (BBP) indicator remains negative, underscoring a dominant bearish sentiment within the market. This indicator shows that bear forces push the price toward lower support levels. However, market participants remain alert for any momentum shifts that could signal a reversal. Such reversals are critical as they often precede major market movements and could indicate either a recovery or a further decline.

Also Read: Crypto PAC Endorses 18 More Candidates for November Elections

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Maxwell Mutuma

Maxwell is a crypto-economic analyst and Blockchain enthusiast, passionate about helping people understand the potential of decentralized technology. I write extensively on topics such as blockchain, cryptocurrency, tokens, and more for many publications. My goal is to spread knowledge about this revolutionary technology and its implications for economic freedom and social good.

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