Renowned stockbroker and cryptocurrency critic Peter Schiff has issued another bearish prediction for Bitcoin (BTC) and its most prominent corporate holder, MicroStrategy. In a series of tweets, Schiff aimed the company’s strategy of using leverage to acquire Bitcoin, warning that this approach could lead to significant financial trouble.
According to Schiff, the Trump administration will not use Bitcoin as a reserve currency, asserting that this would burst the bubble of possibility for investors who had bet on such an occurrence. As Schiff points out, this sparked panic selling that could weaken the cryptocurrency and raise issues for MicroStrategy – a company that invested heavily in the digital asset.
Also Read: Ripple CEO Meets Donald Trump Amid Regulatory Shifts, XRP Price Sees Mixed Signals
Michael Saylor and MicroStrategy’s Strategy Under Scrutiny
MicroStrategy, led by CEO Michael Saylor, has become one of the largest holders of Bitcoin among publicly traded companies. Schiff had anticipated that Saylor would be under pressure to increase the use of leverage in Bitcoin purchases to prevent a collapse in Bitcoin Value. But he is positive that this is only going to prolong the inevitable since Bitcoin is going to crash and bring down the MicroStrategy share price along with it.
On January 7, MicroStrategy’s stock price fell by 9.94%, closing at $341.42, reflecting growing concerns about its heavy reliance on Bitcoin. Schiff dismissed the line of business as a blatant speculation, which was synonym to an immense misapplication of capital much to the detriment of shareholders.
When questioned about his stance, Schiff clarified that he does not hate Bitcoin but opposes the speculative frenzy surrounding it. He claimed that the mania has defiled the sound money principles and can paint a perception of libertarian financial outlook.
Bitcoin Faces Bearish Technical Indicators
Bitcoin’s price has also been under pressure, falling below the critical $100,000 mark. As of January 8, Bitcoin was trading at $95,698.37, representing a 5.71% drop in the past 24 hours, according to CoinMarketCap. The Relative Strength Index (RSI) for Bitcoin stood at 46.88, suggesting that bearish sentiment had overtaken the market. Analysts believe that the downward gradient of the RSI indicates further price declines are possible in the near term.
Bitcoin’s $100,000 resistance level remains a key psychological and technical threshold. Breaching this level would require strong buyer support, which appears to be lacking amid current market conditions.
Conclusion
Peter Schiff’s warnings highlight growing concerns about Bitcoin’s volatility and the risks of heavily leveraged strategies. MicroStrategy’s reliance on Bitcoin has scrutinized the company, especially as market sentiment turns bearish. The coming weeks will likely test Bitcoin’s recoverability and determine whether MicroStrategy’s strategy will withstand the pressure.
Also Read: Ripple Adopts Chainlink to Enhance RLUSD Stablecoin Utility in DeFi
