Peter Schiff: I always thought that gold would burst the Bitcoin bubble, but unexpectedly it was silver. "Crypto treasury companies" are facing a brutal bear market.
As Bitcoin prices continue to fall, the "hodling" strategy of holding large amounts of cryptocurrency as corporate reserves is facing a severe test.
Recently, the cryptocurrency market suffered large-scale liquidations. On Thursday, Bitcoin prices fell below the key support level of $110,000, and Ethereum dropped below $3,900. At the same time, spot silver surged sharply, breaking through $45 today, marking a fourteen-year high.
Amid this market turmoil, precious metals dealer and well-known “Bitcoin antagonist” Peter Schiff warned on social media platform X that companies holding Bitcoin as an asset are entering a “brutal bear market,” and the viability of their business models is being questioned.
He said it is uncertain whether such companies, including MicroStrategy (MSTR), can weather the crisis safely.
As a staunch gold bull, he also stated that “I always thought it would be gold that bursts the Bitcoin bubble. Now, it looks like it might be silver.”
These remarks have magnified market concerns about the sustainability of the “hodling” company model. Market data shows that MSTR’s share price has plummeted recently, falling below $300 for the first time since April this year, almost erasing its gains for the year.
MSTR is also known as the “Bitcoin proxy stock” because it holds a massive amount of Bitcoin. Its share price is highly tied to Bitcoin prices, and Bitcoin weakness has directly dragged down its stock performance in recent days.
Schiff issues bear market warning, while MSTR increases holdings against the trend
Previously, Schiff pointed out that although many companies are emulating MSTR founder Michael Saylor’s “fantastical business strategy,” few pay attention to the sharp decline in MSTR’s share price.
At that time, Schiff warned that Ethereum is already in a bear market, and Bitcoin will be next.
Despite the drop in share price, Michael Saylor does not appear to have wavered in his strategy of increasing Bitcoin holdings.
Reportedly, MSTR bought another 850 Bitcoins last week. Disclosure documents show that MicroStrategy now holds a total of 639,835 Bitcoins, with a total purchase cost of $4.733 billion.
Notably, some of the recent funds used by the company to purchase Bitcoin have come from selling MSTR's own stock. Amid an asset price downturn, increasing high-volatility crypto holdings by selling equity undoubtedly heightens the company’s financial risk and raises questions among investors about the soundness of its strategy.
From a technical analysis perspective, the stock outlook for MSTR is also bleak. Analyst Peter DiCarlo pointed out that after briefly holding up its support level, MSTR’s share price has shown signs of “breaking down,” and the rebound anticipated by the market weeks ago has not materialized.
DiCarlo warned that the current price level must hold, or else MSTR’s share price could be in “serious trouble” in the coming months; if support is lost, the price may further drop to the $240 level.
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