Economist Peter Schiff slammed Strategy Inc.’s (NASDAQ:MSTR) Bitcoin (CRYPTO: BTC) investment approach on Thursday, arguing that the company would have been better placed had it chosen any other asset.
Schiff Sees Problems For Strategy
In an X post, Schiff pointed out that despite spending over $48 billion on Bitcoin in the past five years, the company’s total paper profits are less than 17%.
Schiff also took a swipe at Strategy co-founder Michael Saylor, stating, “Had Saylor bought just about any other asset, MSTR would have been better off.”
He also said that the company would “vanish” if it tried to take profits on its BTC holdings.
Bitcoin’s Slump Affects MSTR
Bitcoin’s ongoing decline has significantly impacted Strategy’s balance sheet. The company currently holds 649,870 BTC at an average price of $74,433. This effectively means that if Bitcoin falls another 13% from its current price, Startegy’s position will turn red.
Moreover, the MSTR stock has dropped 40% over the last month and 60% from its record highs set earlier this year.
See Also: Peter Schiff Warns ‘The Race To Get Out Of Bitcoin Is On’ As BTC Drops 4%
Schiff has escalated the attack on Saylor and his Bitcoin-hoarding company lately. Earlier this week, he argued that the company’s high-yield preferred shares, marketed as income products, are dangerously misunderstood by investors. He warned that dividends could disappear if not declared by the company.
Saylor Says Company Is Secured
Saylor, on the other hand, has defended the company’s business model. He stated that as long as Bitcoin increases by 1.25% annually, Strategy can maintain its dividend payments indefinitely and boost shareholder value. He also claimed that the company is “engineered” to endure an 80 to 90% drawdown and continue operating.
Strategy has indicated earlier that if it fails to secure equity and debt financing on time, it may have to sell Bitcoin to pay its financial obligations, and that too at a price lower than the cost basis. Though a usual disclaimer, it contrasted sharply with Saylor’s “Never sell your Bitcoin” narrative.
Price Action: At the time of writing, BTC was exchanging hands at $86,071.65, down 6.75% in the last 24 hours, according to data from Benzinga Pro.
Strategy shares rose 0.21% in after-hours trading to $177.50. The stock closed 5.02% lower at $177.13 during Thursday’s regular trading session.
The stock maintains a weaker price trend over the short, medium and long terms. How does it compare with Coinbase Global Inc. (NASDAQ:COIN) and other cryptocurrency-linked stocks? Visit Benzinga Edge Stock Rankings to find out.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
Photo Courtesy: T. Schneider on Shutterstock.com
$BTCBitcoin – United States dollar$85638.01-1.03%OverviewCOINCoinbase Global Inc$239.000.35%MSTRStrategy Inc$177.350.12%Market News and Data brought to you by Benzinga APIs
