NAIROBI (CoinChapter.com) — MicroStrategy’s stock price surged 528% in 2024, riding the wave of Bitcoin’s explosive rally to a new record high of over $94,000. Yet gold advocate Peter Schiff has cast doubts on its sustainability, labeling the company’s strategy as a risky feedback loop tied directly to cryptocurrency markets.
Peter Schiff Warns of a Looming ‘Bloodbath’
Gold investor and Bitcoin critic Peter Schiff labeled MicroStrategy “the most overvalued stock in the MSCI World Index.” He warned its reliance on Bitcoin creates risks, predicting severe fallout if Bitcoin prices drop.
Schiff’s critique focuses on MicroStrategy’s feedback loop, where Bitcoin’s rising value increases the company’s stock price, enabling it to sell shares and acquire more Bitcoin. This cycle artificially inflates both MicroStrategy’s stock and Bitcoin’s value. Schiff argued that this model cannot last indefinitely and would collapse if Bitcoin’s price falls.
If Bitcoin’s price drops, Schiff warns MicroStrategy could face severe challenges. The value of its Bitcoin holdings would shrink, leading to unrealized losses. Its debt-driven strategy could become unsustainable, making it harder to meet obligations. Schiff described these interconnected risks as a potential “bloodbath” for the company.
BitMEX Research supports these concerns, calling MicroStrategy’s strategy an “infinite money glitch.” While Bitcoin’s price rise has benefited the company so far, the research warned that this approach depends heavily on continuous growth and exposes the firm to liquidation risks if Bitcoin crashes.
Record Bitcoin Purchase and Rising Risks
MicroStrategy holds 331,200 Bitcoin, valued at over $30 billion. Its latest purchase, 51,780 Bitcoin for $4.6 billion at $88,627 per coin, highlights its commitment to the cryptocurrency.
Bitcoin prices hit $94,000 the day after MicroStrategy’s announcement, further boosting the company’s stock. However, this increases the company’s dependence on Bitcoin’s volatility. A price crash could lead to asset sales and financial instability.
Institutional Investors Bet Big on MicroStrategy
Despite these warnings, institutional investors have shown considerable interest in MicroStrategy. Data reveals that institutional ownership of the company’s shares more than doubled in Nov. 2024. Vanguard holds 17.45 million shares worth $6.71 billion, with Capital International leading at 17.53 million shares.
Wall Street giants such as Morgan Stanley and BlackRock have also increased their stakes, collectively owning billions in MicroStrategy shares.
A Bitcoin downturn could result in steep losses for institutional investors, given MicroStrategy’s stock volatility. As of Nov. 2024, MSTR’s volatility stood at 32.65%, compared to Bitcoin’s 16.86%, making it riskier than the cryptocurrency itself.
For now, MicroStrategy’s fortunes are tied to Bitcoin’s performance. But as Schiff pointed out, no system built on endless growth can last forever.
… [Trackback]
[…] Find More here on that Topic: coinchapter.com/microstrategy-stock-cannot-go-up-forever-gold-veteran/ […]
**aquasculpt**
aquasculpt is a premium fat-burning supplement meticulously formulated to accelerate your metabolism and increase your energy output.
**backbiome**
backbiome is a naturally crafted, research-backed daily supplement formulated to gently relieve back tension and soothe sciatic discomfort.
**boostaro**
boostaro is a specially crafted dietary supplement for men who want to elevate their overall health and vitality.
**aquasculpt**
aquasculpt is a revolutionary supplement crafted to aid weight management by naturally accelerating metabolism
**vivalis**
vivalis is a premium natural formula created to help men feel stronger, more energetic, and more confident every day.
**hepatoburn**
hepatoburn is a high-quality, plant-forward dietary blend created to nourish liver function, encourage a healthy metabolic rhythm, and support the bodys natural fat-processing pathways.
**nitric boost**
nitric boost is a daily wellness blend formulated to elevate vitality and support overall performance.
**synadentix**
synadentix is a dental health supplement created to nourish and protect your teeth and gums with a targeted combination of natural ingredients
**nervecalm**
nervecalm is a high-quality nutritional supplement crafted to promote nerve wellness, ease chronic discomfort, and boost everyday vitality.
**yusleep**
yusleep is a gentle, nano-enhanced nightly blend designed to help you drift off quickly, stay asleep longer, and wake feeling clear
**mind vault**
mindvault is a premium cognitive support formula created for adults 45+.
**prodentim**
prodentim is a distinctive oral-care formula that pairs targeted probiotics with plant-based ingredients to encourage strong teeth
**balmorex pro**
balmorex is an exceptional solution for individuals who suffer from chronic joint pain and muscle aches.
**glpro**
glpro is a natural dietary supplement designed to promote balanced blood sugar levels and curb sugar cravings.
**vitrafoxin**
vitrafoxin is a premium brain enhancement formula crafted with natural ingredients to promote clear thinking, memory retention, and long-lasting mental energy.
**provadent**
provadent is a newly launched oral health supplement that has garnered favorable feedback from both consumers and dental professionals.
**glucore**
glucore is a nutritional supplement that is given to patients daily to assist in maintaining healthy blood sugar and metabolic rates.
**femipro**
femipro is a dietary supplement developed as a natural remedy for women facing bladder control issues and seeking to improve their urinary health.
**vertiaid**
vertiaid is a high-quality, natural formula created to support stable balance, enhance mental sharpness, and alleviate feelings of dizziness
**sleep lean**
is a US-trusted, naturally focused nighttime support formula that helps your body burn fat while you rest.
**sugarmute**
sugarmute is a science-guided nutritional supplement created to help maintain balanced blood sugar while supporting steady energy and mental clarity
**tonic greens**
tonic greens is a cutting-edge health blend made with a rich fusion of natural botanicals and superfoods, formulated to boost immune resilience and promote daily vitality.
**prostavive**
prostavive Maintaining prostate health is crucial for mens overall wellness, especially as they grow older.
**prime biome**
The natural cycle of skin cell renewal plays a vital role in maintaining a healthy and youthful appearance by shedding old cells and generating new ones.
**gluco6**
gluco6 is a natural, plant-based supplement designed to help maintain healthy blood sugar levels.
**oradentum**
oradentum is a comprehensive 21-in-1 oral care formula designed to reinforce enamel, support gum vitality, and neutralize bad breath using a fusion of nature-derived, scientifically validated compounds.
**biodentex**
biodentex is a dentist-endorsed oral wellness blend crafted to help fortify gums, defend enamel, and keep your breath consistently fresh.
**ignitra**
ignitra is a premium, plant-based dietary supplement created to support healthy metabolism, weight management, steady energy, and balanced blood sugar as part of an overall wellness routine
**finessa**
Finessa is a natural supplement made to support healthy digestion, improve metabolism, and help you achieve a flatter belly.
**neuro sharp**
neurosharp is a next-level brain and cognitive support formula created to help you stay clear-headed, improve recall, and maintain steady mental performance throughout the day.