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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.
See Also: Wall Street, Bitcoin Drop As Dollar, Treasury Yields Rebound: What’s Moving Markets Thursday?
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.”
Strategy has spearheaded Bitcoin’s corporate adoption, building its reserve with proceeds from common stock, preferred stock, and convertible bond issuances. The firm held a stash of 639,835 BTC, worth over $70 billion as of this writing, according to bitcointreasuries.net
Price Action: At the time of writing, BTC was trading at $109,544.46, down 1.87% in the last 24 hours, according to data from Benzinga Pro.
Shares of MSTR dipped 0.23% in after-hours trading after closing 7% lower at $300.70 during Thursday's regular trading session.
MSTR demonstrated a high momentum score—a measure of the stock's relative strength based on its price movement patterns and volatility over multiple timeframes—as of this writing. To find out how the stock compares against other cryptocurrency treasury companies, visit Benzinga Edge Stock Rankings.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
Strategy | Photo courtesy: PJ McDonnell / Shutterstock.com
