{"id":19041,"date":"2024-11-29T13:48:31","date_gmt":"2024-11-29T11:48:31","guid":{"rendered":"https:\/\/forklog.com\/en\/peter-schiff-predicts-bankruptcy-for-microstrategy\/"},"modified":"2024-11-29T13:48:31","modified_gmt":"2024-11-29T11:48:31","slug":"peter-schiff-predicts-bankruptcy-for-microstrategy","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/peter-schiff-predicts-bankruptcy-for-microstrategy\/","title":{"rendered":"Peter Schiff Predicts Bankruptcy for MicroStrategy"},"content":{"rendered":"<p>Peter Schiff, President of Euro Pacific Capital and a critic of Bitcoin, described MicroStrategy as a &#8220;great short&#8221; and predicted its bankruptcy in an interview with Kitco News.<\/p>\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\">\n<div class=\"wp-block-embed__wrapper\">\n<iframe loading=\"lazy\" title=\"Bitcoin Strategic Reserve: Selling Gold for Bitcoin Is \u2018Worst Monetary Mistake\u2019 US Can Make | Schiff\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/QRfn1h_3VYU?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe>\n<\/div>\n<\/figure>\n<p>The entrepreneur criticized Michael Saylor&#8217;s strategy of large-scale Bitcoin purchases through debt financing.<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>&#8220;If you understand the dynamics of how this works, you realize that it can only end in MicroStrategy&#8217;s collapse,&#8221; Schiff stated.<\/p>\n<\/blockquote>\n<p>According to him, the firm&#8217;s obligations to pay large sums to convertible bondholders pose a potential risk if the cryptocurrency price significantly drops.<\/p>\n<p>Bondholders are under the &#8220;false impression&#8221; that they have invested in Bitcoin without risk of loss and will simply get their money back even in the event of bankruptcy, Schiff noted.<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>&#8220;The problem is that MicroStrategy promises to return so much that it won&#8217;t be able to do so if the cryptocurrency price falls, because the company has no money, it spent it on Bitcoins,&#8221; said the head of Euro Pacific Capital.<\/p>\n<\/blockquote>\n<p>The only way for Saylor&#8217;s company to repay its debts would be to liquidate its reserves in digital gold, Schiff believes.<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>&#8220;When the largest seller and owner transforms into the largest buyer, guess what happens to the price? It falls. So, I think it will end in only one way \u2014 bankruptcy,&#8221; Schiff concluded.<\/p>\n<\/blockquote>\n<p>Renowned analyst Willy Woo also pointed out the risk of MicroStrategy&#8217;s corporate debt liquidation. The expert noted that if bondholders do not convert them into shares before maturity, the company will be forced to sell Bitcoin to make payments.<\/p>\n<blockquote class=\"twitter-tweet\" data-lang=\"en\">\n<p lang=\"en\" dir=\"ltr\">Thoughts on MSTR Liquidation Risk:<\/p>\n<p>The only liquidation risk I can see is via their convertible debt offerings:<\/p>\n<p>1) If convertible debt buyers do not convert to shares before maturity, it forces MSTR to sell BTC to reimburse debt holders.<\/p>\n<p>2) This would happen if MSTR doesn&#8217;t\u2026 <a href=\"https:\/\/t.co\/GFIOeAqQPL\">pic.twitter.com\/GFIOeAqQPL<\/a><\/p>\n<p>\u2014 Willy Woo (@woonomic) <a href=\"https:\/\/twitter.com\/woonomic\/status\/1861810991614545980?ref_src=twsrc%5Etfw\">November 27, 2024<\/a><\/p><\/blockquote>\n<p> <script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>Woo estimates this scenario will become a reality if MicroStrategy&#8217;s stock does not rise by ~40% in the next five to seven years.<\/p>\n<p>Among additional threats to the company&#8217;s Bitcoin strategy, he cited the potential reduction in bond premiums to <span data-descr=\"net asset value\" class=\"old_tooltip\">NAV<\/span>. This could occur due to the spread of imitator competitors and possible regulatory intervention in future purchases.<\/p>\n<p>Earlier, Bloomberg Opinion columnist Lionel Laurent expressed doubts about the long-term viability of MicroStrategy&#8217;s debt policy.<\/p>\n<p>He noted the company&#8217;s apparent overvaluation \u2014 its stock has risen by ~650% since the beginning of the year, while digital gold has increased by ~120%. For investors considering the firm&#8217;s stocks and bonds as &#8220;proxy Bitcoin&#8221; investments, the offer becomes too expensive.<\/p>\n<p>The expert was concerned about MicroStrategy&#8217;s plans to raise $42 billion over three years to continue purchasing the leading cryptocurrency.<\/p>\n<p>However, analysts at Bernstein believe that the company&#8217;s &#8220;unprecedented&#8221; accumulation of digital gold reserves could lead to a further 49% rise in its stock.<\/p>\n<blockquote class=\"twitter-tweet\" data-lang=\"en\">\n<p lang=\"en\" dir=\"ltr\">NEW: $800 billion Bernstein says MicroStrategy&#8217;s &#8216;unprecedented&#8217; <a href=\"https:\/\/twitter.com\/hashtag\/bitcoin?src=hash&#038;ref_src=twsrc%5Etfw\">#bitcoin<\/a> buying could push <a href=\"https:\/\/twitter.com\/search?q=%24MSTR&#038;src=ctag&#038;ref_src=twsrc%5Etfw\">$MSTR<\/a> up another 49%.<\/p>\n<p>INSANE ? <a href=\"https:\/\/t.co\/F3ady2bLGY\">pic.twitter.com\/F3ady2bLGY<\/a><\/p>\n<p>\u2014 Nikolaus Hoffman (@NikolausHoff) <a href=\"https:\/\/twitter.com\/NikolausHoff\/status\/1862199083286270172?ref_src=twsrc%5Etfw\">November 28, 2024<\/a><\/p><\/blockquote>\n<p> <script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>Specialists at BitMEX have previously called the liquidation of MicroStrategy&#8217;s Bitcoin reserves due to market conditions &#8220;extremely unlikely.&#8221; They estimate that the asset would need to plummet to $15,000 for this to happen.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Peter Schiff, President of Euro Pacific Capital and a critic of Bitcoin, described MicroStrategy as a &#8220;great short&#8221; and predicted its bankruptcy in an interview with Kitco News. The entrepreneur criticized Michael Saylor&#8217;s strategy of large-scale Bitcoin purchases through debt financing. &#8220;If you understand the dynamics of how this works, you realize that it can [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":19040,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"","news_style_id":"","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[1207,1138,1298],"class_list":["post-19041","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-microstrategy","tag-opinions","tag-peter-schiff"],"aioseo_notices":[],"amp_enabled":true,"views":"77","promo_type":"","layout_type":"","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/19041","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/comments?post=19041"}],"version-history":[{"count":0,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/19041\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media\/19040"}],"wp:attachment":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media?parent=19041"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/categories?post=19041"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/tags?post=19041"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}