Peter Schiff has warned that Bitcoin’s recent resilience could make a later reversal more painful for Strategy, arguing that the company has lost the ability to use STRC to raise fresh money for Bitcoin purchases.
His broader view is that markets have absorbed worsening economic signals without fully pricing the risks he sees.
Schiff Sees Strategy’s Financing Problem
In the latest Peter Schiff Show, the economist noted that Bitcoin had gained almost 1% on the week and was trading around $84,500 at the time of recording. He also pointed to Strategy’s STRC price, which had recovered to about $99.40 after falling to $75 during the summer.
He attributed that recovery to Strategy repurchasing STRC and Bitcoin’s move back above $80,000, which may have improved confidence and prompted short covering. But he argued that the rebound does not solve the financing problem.
“There’s no way that he’s going to be able to start selling more STRC. And that means he’s not going to be able to raise money to really start buying more Bitcoin,” Schiff stated, referring to Strategy’s Michael Saylor.
Strategy’s latest figures show 848,000 BTC, equal to just over 4% of total supply, alongside $4.8 billion in USD reserves and $833 million in cash. Its STRC position has an $8.93 billion notional value, with a 12% variable dividend and 12.07% effective yield.
Bitcoin has since moved higher, with CoinGecko data at the time of writing putting it around $86,000, up more than 4% in seven days and over 8% across 30 days, while remaining down 30% from where it was one year ago.
But despite what Schiff says, Strategy has continued buying the asset. As CryptoPotato reported earlier today, the company acquired 334 BTC for about $28.7 million. It also repurchased another $176 million of STRC. This latest buy is quite smaller than the 1,665 units bought for about $142.8 million in late September, which came together with $152 million of STRC.
Schiff Links Bitcoin Risk to a Wider Market Break
Schiff’s argument extends beyond Strategy’s capital structure. He believes Bitcoin is benefiting from a stock market that has so far absorbed weak economic and bond-market signals without a larger correction.
He referred to softer PCE inflation numbers, poorer-than-expected employment figures, and lower expectations of an interest rate hike in October, but maintained that bond prices were falling. The oil price stood at about $91 a barrel following a promise by the G7 to release 100 million barrels from their strategic reserves.
Schiff’s worry is that the markets are taking resiliency as an indicator that the bad news no longer matters, but he thinks things are only going to keep getting worse.
“At some point, Bitcoin is going to roll over, especially if we get a pullback in the tech market, which we haven’t had yet,” he warned.
The post Peter Schiff Predicts Bitcoin Will Drop If Tech Stocks Pull Back appeared first on CryptoPotato.
Source: https://cryptopotato.com/peter-schiff-predicts-bitcoin-will-drop-if-tech-stocks-pull-back/
