Prominent gold advocate and BTC critic Peter Schiff has stated that if Bitcoin loses 50% of its current valuation, the treasury company Strategy will be decimated completely. He gave these comments in another hard-hitting tweet that rubbished claims that the firm could remain safe in the event of such a massive price dump.
Bitcoin is trading right around the $64k price level at press time, after a desperate defense of the $60k support level over the last couple of weeks. The cryptocurrency was widely touted to drop below its long-term price support level, and it did for a couple of days, but the bulls eventually clawed back some control. Many analysts believe it will eventually fall below $60k in the coming months.
Schiff tweeted:
Schiff highlighted the risks of Strategy’s (MSTR) heavy Bitcoin exposure. He argued that a potential drop to $30k would result in over $40 billion in unrealized losses for the company, assuming the firm makes no further purchases. He predicted that both MSTR and the high-yield STRC stocks would collapse if Bitcoin fell even further.
Strategy’s Bitcoin Dilemma
According to the latest figures from Strategy, the company holds more than 843,775 BTC in its wallets, purchased at a price of roughly $75k-$76k per coin. The company has pumped more than $63 billion into the premier cryptocurrency, and a major portion of this purchase has been funded by capital raised through STRC securities that promise a yearly yield in excess of 11%.
 
While critics like Peter Schiff have always criticized this move by Strategy since its inception, recently several crypto influencers and CEOs have cautioned Saylor and Strategy against making further major purchases, especially with the help of high-yield credit. CryptoQuant CEO Kim is among those who recently criticized the risky buying model.
Strategy, under Saylor, has transitioned from a business intelligence firm to a leveraged Bitcoin treasury vehicle. As a result of his apparently reckless buying spree, Strategy’s total market capitalization has already dropped below $30 billion, far less than the value of its BTC stash. It shows waning investor confidence in the setup, which is fueling further attacks from long-term critics like Schiff.
The Future
Despite current troubles, proponents like Lawrence Lepard have come out in support of Strategy’s aggressive purchases. He believes that Strategy can survive a price crash to $30k, and he is banking on the long-term appreciation of the digital asset to redeem the firm’s fortunes.
Schiff disagrees and states that the crypto treasury approach will be the death of the company, and the only solution is to sell the BTC at current prices, redeem all creditors, and go back to its previously successful business model that still generates hundreds of millions of dollars of operating profit every year.
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