Bitcoin detractor and economist Peter Schiff has taken another swipe at the digital asset and MicroStrategy, a public company that is heavily invested in the digital asset. Schiff has always been vocal about his disdain for bitcoin and has now turned his attention to MicroStrategy and its former CEO, Michael Saylor.
Why MicroStrategy Bought Bitcoin
In a tweet, Peter Schiff revealed to his more than 890,000 Twitter followers what he says was the real reason behind Michael Saylor and MicroStrategy’s move to begin investing in bitcoin. According to Schiff, former CEO Michael Saylor had admitted that buying BTC was actually a last-ditch effort to save the company from being liquidated. He further dissed the company saying that it has nothing going for it other than a leveraged speculative position on the digital asset.
For the first time I heard @saylor admit that adding #Bitcoin to the @MicroStrategy balance sheet was basically a Hail Mary to avoid liquidating the company. If the only thing $MSTR has going for it is a leveraged speculative position in Bitcoin, than it has nothing going for it.
— Peter Schiff (@PeterSchiff) December 20, 2022
As expected, Schiff’s strikes toward bitcoin were met with pushback from supporters. One user took to the comment section to defend MicroStrategy’s decision as one that was taken so it could acquire the “scarcest and most desirable asset the world has ever seen.” However, Schiff would denounce this saying that bitcoin was in no way scarce nor was it desirable. He also added that bitcoin was a way to lose money.
Schiff continues to advocate for gold as a better option for investors. Bitcoin maximalist Dan Held hit back at the economist saying, “[Gold] is hardly scare and in no way desirable. If you want to lose your money there are plenty of ways to do it. You don’t need to buy [Gold].”
BTC touches above $16,800 | Source: BTCUSD on TradingView.com
So Why Did Saylor Buy BTC?
Michael Saylor is arguably one of the most vocal bitcoin bulls. The ex-CEO of MicroStrategy has previously stated that his decision to purchase bitcoin was that he believed that the digital asset is the future of finance. Additionally, Saylor previously revealed that he had personally owned BTC before MicroStrategy had begun purchasing the cryptocurrency, his own personal holdings serving as evidence for the profitability of the asset.
As the company expects the price of bitcoin to appreciate over time, it believes that it will serve as an effective inflation hedge over the long term. Saylor himself has referred to BTC as “digital gold, saying “We find the global acceptance, brand recognition, ecosystem vitality, network dominance, architectural resilience, technical utility, and community ethos of Bitcoin to be persuasive evidence of its superiority as an asset class for those seeking a long-term store of value.”
MicroStrategy’s decision to invest in bitcoin also helped boost the popularity of the company, going from a company operating in the background to one of the most popular names among cryptocurrency enthusiasts.
MicroStrategy is currently the public company with the largest BTC holdings in the world. The company held 130,000 BTC as of Sep. 30, 2022, worth over $2.1 billion at current market prices. At a cumulative entry value of almost $4 billion, the company is recording more than $1.7 billion in unrealized losses following the market downturn.
Featured image from Blockchain Reporter, chart from TradingView.com