Economist and Bitcoin (BTC) skeptic Peter Schiff has expanded his criticism of the asset, dismissing its recent short-term gains while noting that there is an opportunity for investors to sell and exit the market.
Talking during an interview with News from Kitco On August 11, Schiff stated that Bitcoin is likely to correct further to $10,000 and is unlikely to experience another high like the 2021 rally.
According to the market strategist of Euro Pacific Asset Management, the broader crypto market gains are not sustainable, calling it a “sucker rally”.
“The market is going to plunge. I think people should take advantage of the rally they’re having right now and get out. A lot of people are still making profits on these tokens. People bought Bitcoin four, five, six years ago and they’re making big profits .Same with Ethereum (ETH). People should get out because otherwise the market is going to take that profit,” he said.
Crypto market bubble to burst
He further emphasized that the crypto market is in a bubble that will burst soon, and the 2022 correction reflected a massive pump and dump. Schiff stated that the market experienced a massive pump after increased crypto hype, but investors did not see the dump.
Furthermore, Schiff, who recently struck a deal with Puerto Rican authorities to liquidate his Euro Pacific Bank, called out institutions that invested in Bitcoin, claiming they would regret the move unless they sold. In particular, the involvement of institutions in Bitcoin was crucial to driving the market rally in 2021.
Schiff’s View on MicroStrategy Bitcoin Losses
Furthermore, the economist singled out MicroStrategy, stating that the company’s Bitcoin strategy has not worked, which is highlighted by the losses.
He questioned MicroStrategy’s outgoing CEO Michael Saylor for claiming that the company is profiting from its first Bitcoin haul. Schiff also said he is willing to discuss the company’s Bitcoin adoption strategy with Saylor. However, he claimed that Saylor has declined his invitations to debate.
It is worth noting that by Q2 2022, MicroStrategy’s Bitcoin holdings were valued at nearly $2.96 billion, against the acquisition value of $3.975 billion.
With several businesses such as lending platform Celsius filing for bankruptcy, Schiff believes MicroStrategy is on the verge of collapse, noting that the stock is overvalued.
“Eventually the price of MicroStrategy stock will crash, and it’s going to be way below where it was when they first started buying Bitcoin,” he said.
It’s worth noting that for 2022 Q2, MicroStrategy reported quarterly revenue of $122.1 million versus expectations of $126 million. The company also recorded a loss of $918.1 million, with $917.8 million attributed to the company’s Bitcoin holdings.
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