Economist Peter Schiff warned Thursday of a severe bear market for Michael Saylor-led Strategy Inc. (NASDAQ: MSTR) and companies mimicking its Bitcoin (CRYPTO: BTC) treasury play.
In an X post, Schiff questioned the viability of companies with large Bitcoin reserves.
“While so many companies have been busy copying Saylor’s harebrained business strategy, few have noticed that MSTR is down 45% from its Nov. 2024 high,” Schiff said.
He predicted a “brutal” bear market for Bitcoin treasury companies, doubting that any, including Strategy, would survive.
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Schiff’s argument comes amid a sharp pullback in Bitcoin’s price, which has dragged down shares of Strategy and other BTC hoarding companies, such as Riot Platforms Inc. (NASDAQ: RIOT) and MARA Holdings Inc. (NASDAQ: MARA).
MSTR has indeed fallen 45% from its November 2024 high of $543, but on a year-over-year basis, Saylor’s company still delivered an impressive return of 81%, and so did Riot Platforms.
|
Asset |
Weekly Gains +/- |
Yearly Gains +/- |
Gains +/- since ATH |
Price (Recorded at 2:50 a.m. ET) |
|
Bitcoin |
-6.22% |
+71.92% |
-12.01% |
$109,544.46 |
|
Strategy Inc. |
-13.40% |
+81.17% |
-45% |
$300.70 |
|
MARA Holdings |
-13.42% |
-8.28% |
-93% |
$16.07 |
|
Riot Platforms |
-6.72% |
+115.44% |
-99.53% |
$16.74 |
Schiff’s prediction contradicts Saylor’s earlier assertions. During the company’s second-quarter earnings call, Saylor had expressed confidence in the company’s viability, asserting that it could endure an 80% BTC drawdown and remain resilient in a bear market.
His confidence stemmed from the company’s pivot to a “robust” perpetual preferred stock strategy, which has no maturity date and retains the initial capital invested.
Earlier this month, Saylor said that Bitcoin treasury companies are at the forefront of a financial rebuild, leveraging “digital capital” and “digital intelligence.” He urged everyone to ignore the “critics and the whiners.”
