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Bitcoin and MicroStrategy on the brink of collapse? Peter Schiff raises the alarm
Gamza Khanzadaev
Economist and crypto critic Peter Schiff warns of an impending collapse for both Bitcoin and MicroStrategy
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Against the background of, to put it mildly, not very encouraging price behavior of Bitcoin and, consequently, the entire cryptocurrency market, the voices of skeptics and critics of the new asset class began to be heard publicly.
Therefore, in a recent series of posts, Peter Schiff has questioned the stability of the cryptocurrency and MicroStrategy, raising concerns about the potential collapse. Despite the buying activity of 11 spot Bitcoin ETFs, Schiff pointed this out Bitcoin it has been trading sideways for over three months and is currently 11% below its March high.
BTC to USD by CoinMarketCap
He questioned market dynamics, asking those who have been selling Bitcoin if ETF investors have been consistent buyers, and what might happen if these ETF buyers lose patience and start selling their holdings.
Schiff then speculates that hedge funds could play a key role in this scenario, suggesting that these funds could buy Bitcoin or ETFs as part of a strategy to short MicroStrategy (MSTR), a company heavily invested in BTC under the leadership of CEO Michael Saylor.
Schiff’s analysis implies a potential domino effect that could have a serious impact on both Bitcoin and MicroStrategy. If hedge funds decide to liquidate their operations, they would have to sell their cryptocurrency holdings. This influx of selling could lead to a sharp drop in the price of Bitcoin. Such a collapse, in turn, would put further downward pressure on MicroStrategy.
About the author
Gamza Khanzadaev
Financial analyst, trader and cryptocurrency enthusiast.
Gamza graduated in Finance and Credit with a specialization in securities and financial derivatives. He then obtained a master’s degree in banking and asset management.
He wants to help cover economic and fintech topics, as well as educate more people about cryptocurrencies and blockchain.