Peter Schiff, a renowned economist and harsh critic of Bitcoin, has warned that the company Strategy (formerly known as MicroStrategy) is at serious risk of bankruptcy due to its leveraged strategy of buying Bitcoin. The company’s shares dropped by 5.74% on Tuesday and further decreased by 4.7% in pre-market trading on Wednesday. Following a strong rally in 2024, the company’s shares have faced significant selling pressure, resulting in a 6% decline since the beginning of the year. Schiff predicts that if the company’s shares are traded at a discount to the value of its Bitcoin assets, this discount will continue to increase until bankruptcy forces Strategy to sell all its Bitcoins, leading to the company’s definite bankruptcy and a Bitcoin price crash. Strategy’s shares have plummeted by 48% since registering its all-time high on November 21, wiping out around $70 billion of its market value.
